Pandora shares popped 1 percent on Wednesday after Piper Jaffray upgraded the company to "overweight" from "neutral."
Piper Jaffray noted that its optimism was driven by Pandora's more positive outlook on music label negotiations, improvement in margins and the upcoming release of an on-demand platform.
The release is expected to bring an additional 9.2 million subscribers and $750 million in revenue.
In June, Pandora CEO Tim Westergren announced that the company's release will be more interactive than previous versions. The release is expecting to bring an additional 9.2 million subscribers and $750 million in revenue.
Piper Jaffray raised its price target estimate for Pandora to $18 from $12.
Pandora's stick has dropped 13 percent in the past year.
Pandora's 12-month performance: