Pandora (NYSE:P) investors are probably regretting that there wasn't a "skip" option when they were placing buy orders for the struggling streaming music pioneer. Shares of Pandora plunged 22.4% last week after the company posted unimpressive quarterly results on Thursday afternoon.

The weakness continues into this week. Pandora stock hit yet another all-time low on Monday, falling 5.6% for the day. Pandora stock has plummeted nearly 29% over just the past two trading days alone, and that's crushing investors and speculators that continue to miscalculate when the stock will bottom out. The shares have fallen 87% since peaking three years ago. 

Perfomers at a Pandora-backed concert.

Image source: Pandora.

Breaking down a bad report

Revenue inched 8% higher to $378.6 million, but that was slightly less than what Wall Street was expecting. A 50% surge in subscription revenue was largely offset by a mere 1% increase in ad revenue and the discontinuation of ticket sales following its sale of Ticketfly

Guidance was even worse. Pandora's now forecasting $365 million to $380 million in revenue for the fourth quarter, a lot less than both the $392.6 million that it rang up a year earlier and the $412.9 million that analysts were targeting. Pandora explained that if you adjust for the the sale of Ticketfly and the roughly $10 million in political adverting revenue it scored a year earlier, that the guidance represents 3.3% growth at the midpoint. Those are fair deductions, but we're still looking at what should be Pandora's weakest period of adjusted revenue growth in its history.

Pandora's problem is that its user base and engagement levels are gradually shrinking. Pandora argues that its user base -- now at 73.7 million active listeners taking in 5.15 billion hours of content during the quarter -- still makes it the country's largest music service. Pandora also said it in its conference call that it's collecting two-thirds of the ad revenue being generated by streaming music services. The problem is that Pandora is struggling to turn its ad-tolerating freeloaders into paying customers. Just 7% (or 5.19 million) of its users are currently paying for one of Pandora's premium tiers.

Wall Street's losing its patience. SunTrust, Stifel, JPMorgan, and B. Riley FBR all downgraded the stock following Thursday afternoon's report. Canaccord stuck to its rating, but slashed its price target. 

Trying to figure out when the stock will bottom out will be tricky, and it's just a matter of time before buyout speculation begins to whirl again. Pandora does have a new CEO, as Roger Lynch took the helm in August, but analysts and investors alike fear that any kind of turnaround will take some time. If Pandora wants to prove them wrong, it's going to have to find a way to grow its user base and speed up the number of premium upgrades. It's a tall order, and that's why the stock is hitting new all-time lows this week.

Rick Munarriz has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Pandora Media. The Motley Fool has a disclosure policy.