Shares of Pandora rose Thursday after analysts at Axiom upgraded the stock to "buy" from "hold."
The stock spiked nearly 3 percent in early trading, before losing altitude. Pandora shares ended the day up 1 percent.
Analysts at the internet media equity research firm put a $16 target on the stock, roughly $4 above its trading price Thursday. Axiom analysts said they had been neutral on the stock for years, "skeptical" of the internet radio service to navigate an increasingly competitive landscape but recently changed their tune.
"We now believe that there is a greater probability of Pandora building a successful and differentiated on-demand service while increasing the value of the core," the Axiom note said. "Users' appetite for paying for music streaming is increasing and Pandora is poised to capture share cost effectively."