While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of Pandora Media, Inc. (NYSE:P) climbed about 1% in premarket trading Monday after Wedbush upgraded the Internet radio services company from neutral to outperform.

So what: Along with the upgrade, analyst Michael Pachter planted a price target of $35 on the stock, representing about 23% worth of upside to Friday's close. So while momentum traders might be turned off by Pandora's sharp pullback over the past month, Pachter's call could reflect a growing sense on Wall Street that its growth prospects are now too cheap to pass up.

Now what: According to Wedbush, Pandora's short-term risk/reward trade-off is pretty attractive at this point. "Pandora will report Q1 results after the market close on Thursday, April 24, and we expect management to raise full-year guidance by the amounts of the Q1 beats at least," said Pachter. "Current FY:14 guidance is for revenue of $870 – 890 million and EPS of $0.13 – 0.17, below our estimates of $902 million and $0.20, and consensus of $893 million and $0.17." More importantly, with Pandora boasting a rock-solid balance sheet and recently weak stock price, the downside might be limited enough to bet on that upbeat outlook. 

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Brian Pacampara has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Pandora Media. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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