Pandora Gets Applause from Analysts and Investors in Wake of Royalty Ruling
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Pandora is sitting better with analysts and investors the Copyright Royalty Board's ruling Wednesday. Its share price jumped 20.8 percent to $16.23 at the start of Thursday trading before leveling off around $15.30 an hour later.

Analysts are pleased Pandora has the CRB decision behind them and has eliminated much of the rate uncertainty that followed the company. Though the CRB's rate schedule calls for an increase in 2016, which will cause a dip in earnings, analysts see the outcome for the company as more positive than negative. Many analysts expected higher rates and annual increases. After 2016, the annual increase will be tied to the change in the Consumer Price Index, and a typical CPI increase of 2 percent is much lower than the nearly 8 percent increase in the ad-supported rate this year.

Not surprisingly, many analysts believe Pandora's share price has room to grow. Price targets, while widely varied, rose as high as $27, a 76 percent premium over the current share price. The more cautious estimates were often in the $18 to $20 range.

Thursday's jump in share price added $384 million to Pandora's market capitalization, which now sits at $3.25 billion. Even so, Pandora shares are well below the 52-week high of $22.60 and sit closer to the 52-week low of $11.38.

Other developments will impact Pandora further down the road. Ticketfly, which the company acquired in October, will impact this quarter's financial statements and could bring incremental benefits if the two companies can benefit one another in ways not possible as two standalone companies. Closer to the end of the year, Pandora will launch on on-demand service that could add significant revenue and help the company offset its radio service's flattened listener growth.