Canaccord Research released a new report on Pandora Media Inc (NYSE:P) this morning and Michael Graham, the analyst that authored it, is still positive on the company. That comes in spite of recent developments in competition to the service, including a direct competitor in Apple Inc. (NASDAQ:AAPL) iTunes Radio.

Pandora

According to Graham, Q3 is going well for the company in terms of advertising. The real reason that iTunes Radio is not yet a problem is that it’s too new. Graham doesn’t see the Apple Inc. (NASDAQ:AAPL) offering affecting Pandora Media Inc (NYSE:P) results too much in September and October numbers. He does list it as a “credible threat,” however.

Pandora battles iTunes Radio

The real theme in Pandora Media Inc (NYSE:P) investing over the next year will be competition. iTunes Radio is the first really scary threat to the company’s business. It operates in the exact same way and the experience is just as good. It’s actually better according to some reviewers. With the wide Apple Inc. (NASDAQ:AAPL) install base, and the brand loyalty operating there, Pandora is in for trouble in the coming year.

Michael Graham sees the new service as a threat, but not an immediate one. He doesn’t think it’s credible enough to lower his price target of $25 per share on Pandora Media Inc (NYSE:P), and in fact raises it to $30 in this report. If the company meets that number in twelve months it would represent a close to 20 percent increase in value.

With competition coming in from Apple Inc. (NASDAQ:AAPL), that’s an optimistic figure. According to Graham, Revenue Per Minute could be as high as $38.32 for the fourth quarter of the year. The analyst previously estimated RPM of just $35. The increase in the value of a consumer’s time on the Pandora Media Inc (NYSE:P) streaming service leads to an increase in expected results and valuation.

Pandora going strong

Shares in Pandora Media Inc (NYSE:P) have risen by about 175 percent since the start of 2013, though they’ve fallen since iTunes Radio was released to the public. If Graham is to be believed, iTunes Radio will not pressure the company in the coming months as it still tries to establish a market.

After that, however, it’s difficult to tell how far the service can go. Graham clearly believes that Pandora Media Inc (NYSE:P) still has a lot of room to grow. That room is getting crowded, however.