Pandora Media Inc (NYSE:P) has seen a 16% YoY growth in the number of its active listeners in November. Canaccord Genuity analyst Michael Graham said in his latest research note to investors that Pandora Media Inc (NYSE:P)’s performance has been encouraging, especially so soon after the launch of iTunes Radio. Shares of the company had tanked more than 10% the day Apple Inc. (NASDAQ:AAPL) announced the launch of iTunes Radio, which posed a serious threat to the company.

Pandora

Pandora successfully weathers iTunes Radio threat

The number of active listeners rose 1.5 million to 72.4 million in November from October’s 70.9 million. The number of listener hours also jumped from 1.47 billion in October to 1.49 billion in November. Meanwhile, Pandora Media Inc (NYSE:P) also increased its market share from 8.06% to 8.44%. Monthly hours per listener went up from 20.5 in October to 20.8 last month. These strong data suggest that the iTunes Radio didn’t have as much impact on Pandora Media Inc. (NYSE:P) as the markets feared.

Pandora

Michael Graham says that Pandora Media Inc (NYSE:P) has historically recorded strong listener growth in December. And the company is expected to do the same this month. That, coupled with strong November data, show that Pandora Media Inc (NYSE:P)’s fundamental outlook remains solid. Canaccord Genuity has a Buy rating on the stock with $35 price target.

Pandora’s challenges

Despite encouraging figures, risks still persist for the Oakland, California-based company. Its business model depends on paying royalties to copyright owners and procuring licenses. Any increase in the rate Pandora Media Inc (NYSE:P) pays for sound recordings and musical works could hamper its profitability.

Moreover, online music market is fiercely competitive. Michael Graham thinks owned music providers including Google Music, iTunes Radio and Spotify could be a threat to Pandora Media Inc (NYSE:P). What if users start preferring owned music over broadcast? Spotify also provides Internet radio services. Though Pandora Media Inc (NYSE:P) has a unique advantage of providing personalized music to each individual’s preference, increased competition could change the landscape.

Pandora Media Inc (NYSE:P) shares were up 0.54% to $29.57 in pre-market trading Thursday. The stock has gained 220% this year.