Pandora Media (P) may be having a cruel summer. There's no way to know for sure. The company behind the leading music discovery app and website stopped issuing monthly performance metrics last year. Suspending the publication of its monthly health reports was a telling move in and of itself, but it has forced the market to lean on third-party sources -- and that's where Triton Digital steps in.

The digital ratings tracker is reporting that average active sessions declined sequentially in July, and year-over-year growth clocked in at a mere 5%. Canaccord Genuity analyst Michael Graham is reporting Triton Digital's latest data in a new update, pointing out how Pandora will have to show healthy improvement in August and September to hit his target of a 7% year-over-year advance in listener hours for the entire quarter.   

Graham is still bullish on the stock, and his $26 price target suggests a roughly 50% return from here. July is a seasonally sleepy time for Pandora, and it's easy to hold out hope that things will pick up later in the summer when teens and young adults go back to school. However, there are two things to keep in mind here.

  • Pandora didn't suffer a sequential dip in listener hours between June and July in 2011, 2012, and 2013 -- the last three years in which it provided monthly audience metrics. 
  • The meager 5% year-over-year growth in July is worrisome because it's stacked up against last year's seasonally soft month of July, too. That's an apples-to-apples comparison. 

The news isn't all bad for Pandora. It has gotten a lot better at monetizing its traffic. Pandora served up 5.3 billion hours of content during the second quarter, just 5% ahead of the prior year's showing. Between higher ad rates and stronger premium subscriptions, it was able to boost revenue by more than 30%. That's a fair trade for most growth investors, painting a tantalizing picture of what's possible with this scalable model.

As long as Pandora's user base is inching higher -- and not the other way around -- the market will be cool with July's dip. Sequential declines in usage for August and September is when warning bells would start to go off.

Pandora isn't taking any chances. It knows that Spotify and the freshly revamped Apple Music are gunning for its eardrums. On Tuesday, it announced that Pandora would be ad-free for an entire day on Sept. 9. It's a move to celebrate its first 10 years of business, but it's probably not a coincidence that next Wednesday also happens to be the new iPhone launch event, where we may get some more info on the early performance of Pandora's rival streaming platform.

Pandora has a little problem, but it's a month or two away from becoming a bigger one.