Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Investors were hitting the mute button today on Pandora Media (NYSE:P) stock today, which was down as much as 14% after its second-quarter earnings report came out last night.  

So what: The headline numbers were actually solid as the Internet radio provider saw revenue grow 38% to $218.9 million, in line with estimates, while adjusted EPS was even with a year ago at $0.04, but beat estimates by a penny. Still, investors seemed concerned by sequentially slowing subscriber growth and listenership as June listener hours per day were down from 55.8 million in May to 53.7 million. The company attributed the slide to seasonality as the summer months may bring users away from listening devices, but Pandora also lost share of U.S. radio listening going from 9.13% to 8.9%.

Now what: The online DJ has been a mystery to Wall Street ever since its IPO back in 2011. The stock has been highly volatile falling as low as $7 and climbing as high as $40 even though its results have been steady all along as it consistently posts strong revenue growth and near breakeven profits. The music space is a fast-changing one, and Pandora faces a number of the threats, but the company's advertising growth is surging in key areas as mobile ad revenue jumped 51% and local ad dollars increased climbed 144%. The music service even raised its full-year EPS guidance from $0.14-$0.18 to $0.16-$0.19, a move that's usually met with cheers from Wall Street. I'd blame today's slide on Pandora's sky-high valuation, which was perhaps deserving of a correction, rather than anything unseemly in the report.

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Jeremy Bowman has no position in any stocks mentioned. The Motley Fool recommends Pandora Media. The Motley Fool 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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