Pandora Media Inc (NYSE:P) releases its fiscal third quarter results very shortly, and analysts think the company is making progress even faster than previously expected. Susquehanna Financial Group analysts Brian Nowak and Michael Costantini remain bullish on Pandora heading into this afternoon’s report.

Pandora

Shares of the company’s stock rose 4% during the regular trading ahead of its next report.

Pandora seems to be making fast progress

The analysts said their most recent conversations with agencies and contacts in the radio industry suggest that Pandora Media Inc (NYSE:P) is “making strong traction” in the market. This matches up with the company’s second quarter conference call in August when it revealed that local advertising revenue was almost equal to total local ad revenue in fiscal year 2013. This would imply that the company generated about $20 million in local ad revenue during the quarter.

They raised their fiscal 2014 and 2015 estimates for Pandora by $6 million or 1% and $12 million or 2%, respectively. They said more local dollars drove their increase and that their national ad dollar estimates have been cut by about 8% as local ads, which have a higher cost per impression, crowd out those national ads.

Pandora increases ad load

In addition to swapping out less expensive national ads for more expensive local ones, Pandora Media Inc (NYSE:P) is also increasing the number of advertising units, which SIG analysts find to be “even more encouraging.” The company introduced “back-to-back” audio ads, which have increased its max ad load from between 3.5 and 4 ads per hour to more than 4 per hour. The company could even reach 5 ads per hour. Since ad demand is outpacing supply, the company should see its ad dollars grow even faster.

SIG analysts are looking for the company to report average ad units per hour of 2.7 in tonight’s results. They’re also expecting to see blended mobile audio cost per impression to grow 17%. They raised their price target from $30 to $36 per share and remain Positive on the company.