Analyst: 1 Uncertainty At Pandora

In a report published Friday, Wedbush analysts maintained an Outperform rating on

, with a price target of $27, saying that the company is likely to report robust 1Q results, although the reaction of investors is uncertain. Pandora is scheduled to report its 1Q (March) results on April 23. The analysts expect the company to meet or exceed the high end of its guidance. Pandora could announce revenue of $225 million, adjusted EBITDA of $(30) million, and EPS of $(0.16), broadly in-line with consensus of $225 million, $(31) million, and $(0.16), respectively. Despite the healthy results, the company's shares "may again react negatively," the analysts said, while adding, "Regardless of the actual results, Pandora shares have reacted negatively to earnings for eight consecutive quarters, and Q1 may be no different." Pandora has indicated that it will reinvest its gross profits to drive market share gains in coming years. In the report Wedbush noted, "Pandora's initiatives are clearly driving listener hours, effectively generating more advertising capacity per hour. With increased ad inventory, a $1.4 billion local advertising revenue opportunity, and the capability to increase both sell-through and pricing of ads, we believe Pandora's revenue growth opportunity is significant." "Pandora users should grow, despite competition and seasonality, and we think it appropriate to value the company based on its number of users," the analysts added.