You have to go back nearly two months to find the last time that shares of Pandora (P) closed in the double digits, but now another Wall Street pro sees that day coming sooner rather than later. 

Benjamin Swinburne at Morgan Stanley resumed coverage of Pandora with an overweight rating. He feels that last month's deal -- with Sirius XM Radio (SIRI -3.39%) investing $480 million for a preferred-share stake -- will fortify Pandora's balance sheet. Swinburne feels that Pandora's core radio business is enough to warrant a $12 price target.

Pandora app on a car dashboard.

Image source: Pandora.

Thinking outside of the Pandora box

Investors have largely turned on Pandora following Sirius XM's subsidiary taking a nearly 20% convertible stake in the digital radio pioneer. Sirius XM had been publicly toying with the idea of swallowing Pandora whole since last summer, and settling for a small stake appears to nip that chatter in the bud.

Some analysts aren't as pessimistic, viewing the stock's fall into the single digits as a good time to be opportunistic. Morgan Stanley's Swinburne isn't alone with a $12 price goal. John Tinker at Gabelli initiated coverage of Pandora with a buy rating and a similar $12 price target two weeks ago.

Pandora is in an interesting position right now. Sirius XM's infusion and proceeds from the $200 million sale of Ticketfly will arm Pandora with the financial means to stay afloat in the cutthroat internet music market. Pandora has a lot riding on its recent push into the Spotify-like on-demand streaming niche, and even with its sizable audience, it can certainly use the financial means to promote its premium offerings. 

The financial cushion will also help Pandora smoke out a compelling new CEO. Founder Tim Westergren announced his resignation last week, and while Pandora's CFO is stepping in for now, it's not going to be permanent. The New York Post was reporting on Wednesday that Adam Bain -- Twitter's former COO -- is the leading contender for Pandora's top post. Bain was instrumental in Twitter's early monetization efforts, so the hope here is that he'll be able to beef up Pandora's free ad-based platform.

Pandora's in a rut these days if we go by its languishing stock price, stagnant usage growth, and slowing revenue gains. The good news is that premium subscription revenue is finally starting to move the needle, and Sirius XM as an incentivized partner can only help. Pandora's stock may be out of favor, but the upside from here is ample if just a couple of its potential catalysts start to click.