Shares of Pandora Media tanked 13 percent Friday, a day after the digital-music company reported its quarterly earnings but disappointing guidance.

Pandora on Thursday reported earning 4 cents a share in the most recent quarter, twice what analysts had projected. The company then said it should earn from 0- 5 cents per share for the whole year, while it had previously said it could earn as much as 8 cents per share.

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On Friday, shares of Pandora dropped $2.80 to $18.91, though the stock is still up 167 percent from its 52-week-low of $7.08.

"In the end, until Pandora can show investors it can slow its cash burn and start improving margins, it may be a wise decision to stay on the sidelines," Steve Symington of the Motley Fool wrote on Friday.

Also on Friday, Wedbush analyst Michael Pachter reiterated his "neutral" rating on the stock but upped his price target by $3 to $22.50, in part due to the roll-out of back-to-back advertising a week ago.

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"Back-to-back ads provide a better listening experience through longer uninterrupted stretches of music while increasing the advertising inventory," Pachter wrote.

Pandora also announced Thursday it will no longer enforce mobile listening cap as of Sept. 1, which had caused a drop in listening hours and royalty payments. At the same time, the company revealed two new cost-saving measures, a sleep timer and a limit of song skips within a 24-hour period.