Pandora (P) shares slipped 2% yesterday after an analyst downgrade.

Wedbush Securities' Michael Pachter may have bumped his target price from $10 to $11.50, but that's not a compliment when the stock closed higher than that on Monday. His rating on the music-discovery speedster is being cut from outperform to neutral.

Let's break this down into the three reasons that Pandora may be heading lower in the coming weeks.

1. The stock has moved too high, too fast
There's really only one reason an analyst would raise a price target but slash a rating, and that's when a stock has shot higher in a hurry. The stock has soared by roughly 60% since bottoming out two months ago.

Have the gains been warranted? The climate has been kind for online companies, but we can't forget that Pandora took a hit in early December after posting uninspiring quarterly results. Pandora really didn't earn this 60% pop.

"Shares have likely benefited from recent positive reports from Google and Netflix," Pachter argues, and there's some truth to that.

Netflix (NFLX 1.74%), Pandora, and Google's (GOOGL -1.97%) YouTube are the only three companies serving more than a billion hours of digital content, and both Netflix and Google came through with blowout quarterly results earlier this month.

However, the comparisons should pretty much end there.

Google is a very profitable search engine. YouTube is a small part of its business, and it's widely believed to be a drag on margins. Netflix now has more than 33 million streaming accounts, and that's premium customers who have made the company surprisingly profitable despite the stiff content licensing fees and costly bandwidth.

Pandora doesn't have the benefits that have made Google and Netflix shine. Yes, Pandora's growing faster than either company, but analysts see nothing but red ink in the near future given Pandora's steep music royalty obligations.

2. Apple isn't going away
Pandora's stock has been vulnerable as reports of Apple (AAPL 0.52%) introducing a streaming service surface.

It's easy to be apprehensive. Apple is the country's leading music retailer, and that's without selling a single CD. If the digital music giant sets its sights on streaming -- and all indications point to Apple lining up licensing rights with the major labels these days -- it's going to leave a mark.

Pachter expects Apple to announce its service early this year. He sees it taking as much as 15% share from Pandora, though the one thing holding it back will be the likely lack of support for Google's Android. The move would limit the service's mobile appeal to iPhone, iPad, and iPod Touch owners.

3. Sirius XM has quietly arrived
Sirius XM Radio (SIRI -4.43%) finally introduced its streaming customized radio platform late last week. It's still in beta, but one can't ignore a company with 23.9 million satellite radio subscribers. These are folks who actually pay to hear audio content, and the same can't be said for most of Pandora's 67.1 million active listeners.

This is where Pandora is the most vulnerable.

Sirius XM has had a hard time selling stand-alone online radio subscriptions at its lofty $14.49-a-month price tag, but it only charges customers paying that same $14.49 a month for receiver-based satellite radio just $3.50 a month more for streaming access.

Between the live channel streams, on-demand content, and now MySXM personalized radio, Sirius XM has a pretty compelling value proposition for audio buffs. Drivers who are already paying the company for access on the road will be encouraged to pay a little more to keep streaming everywhere they go.

MySXM won't be a threat to Pandora's freeloaders, but it will make it harder for the company to convert those listeners into paying Pandora One customers. At a time when Pandora is bellyaching about the high music royalties that it has to shell out, Apple and Sirius XM are about to join Spotify in stealing away premium subscribers from Pandora.

Streaming on
One can always argue that Pandora's 60% pop was the handiwork of the stock simply being too cheap when it was trading for a little more than $7 in November. There's certainly some truth to that, but the fundamentals haven't exactly improved. Yes, the growth metrics that followed for the months of November and December were healthy, but Pandora's guidance for the holiday quarter was disappointing.

The impressive year-over-year growth spurts will dry up quickly given the recent sequential stagnancy. Red ink and a model that relies too heavily on advertising aren't good looks when premium services are the ones being rewarded by investors.

Pandora's still growing, but the growing pains are also starting to show.