Pandora is skyrocketing after losing a less money than expected

Traders work at the kiosk where Pandora internet radio is traded on the floor of the New York Stock Exchange, in this June 15, 2011 file photo.  REUTERS/Brendan McDermid/Files

Thomson Reuters

File photo of traders working at the kiosk where Pandora internet radio is traded on the floor of the New York Stock Exchange

  • Pandora blew past Wall Street earnings expectations Thursday.
  • Shares are up 25% Friday.
  • Investors are applauding the promise of the future of streaming music, as well as Pandora's advertising technology improvements.
  • The stock is now at levels not seen since November 2017.
  • Watch Pandora trade in real time here.

Pandora shares are soaring, up 25% Friday, after the company lost a lot less money that Wall Street analysts were expecting.

The streaming-music app posted an adjusted loss of $0.27 a share, beating the $0.38 loss that Wall Street was expecting. Revenue came in at $319.2 million, topping the $304.3 million consensus. Advertisement

"Music streaming and digital audio continue to see massive growth, and this quarter we took key steps to position Pandora to capture this significant opportunity," CEO Roger Lynch said in the earnings release.

Pandora showed a strong focus on making its advertising platform as appealing to marketers as possible. The company acquired AdsWizz, which could greatly improve the technology and usability of its ad platform. The acquisition made Pandora the largest ad-supported digital audio platform.

But not everybody is so excited about Pandora's earnings results. RBC Capital Markets analyst Mark Mahaney maintained his $6 price target, and said he thinks there are still some question marks surrounding core parts of Pandora's business.

"There are still three major transitions going on at Pandora right now - product, management/board & strategy," Mahaney wrote in a post-earnings note to clients.

In order for Pandora to be a plus-performing stock in Mahaney's eyes, Pandora would have to show more stable results in its active user base, advertising revenue growth, and a clearer path to profitability. Shares had been sitting in a range below $6 since November 2017, well below their $16 initial public offering price. Pandora is now up 46.03% on the year. Advertisement

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