Is Pandora the "Netflix of Radio"?

Is Pandora the "Netflix of Radio"?

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of online music streamer Pandora Media have popped today by as much as 10% following an analyst upgrade.

So what: Morgan Stanley boosted its rating on Pandora from "equalweight" to "overweight," while assigning a $24 price target. The analyst believes that Pandora is the best way to capitalize on the shift to online radio, since Pandora is a "pure play" on the sector.

Now what: Analyst Scott Devitt characterizes Pandora as the "Netflix of Radio," saying the company offers a disruptive form of content consumption. Even as rivals continue to enter with competing streaming services, Pandora remains the market leader and its expansion into other areas like automobiles may strengthen its position, according to Devitt. One key distinction is that the bulk of Pandora's revenue comes from advertising, while Netflix has no advertising revenue.

Interested in more info on Pandora? Add it to your watchlist by clicking here.

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Fool contributor Evan Niu, CFA, has no position in any stocks mentioned. The Motley Fool recommends Netflix and Pandora Media. The Motley Fool owns shares of Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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