After falling nearly 25% in 2015, shares of Pandora Media (NYSE:P) slumped another 23.5% in the first month of the year, dropping from a January open of $12.70 a share to a January 29 close of $9.72, according to S&P Capital IQ data.

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Source: YCharts.com.

What: Pandora's price has fallen steadily since it reported Q3 earnings in October. That report was not even a bad one. The company slightly missed analysts' revenue estimates, but still saw revenue grow by just over 30%. In addition, earnings per share came in at $0.10, right at the point of consensus expectations.

Some signs of long-term trouble appeared as active listeners rose year over year, but were down from 79.4 million at the end of Q2 to 78.1 million at the end of Q3. In addition, the company also issued revised Q4 earnings guidance "in the range of $325 million to $330 million," with adjusted EBITDA "expected to be in the range of $25 million to $30 million."

That's below the average analyst expectation of $351.9 million, according to a piece by my Fool colleague Timothy Green, which examined the company's 2015 stock drop.

So what: Pandora didn't give any guidance as to why it lowered expectations for the quarter. That news, coupled with the alarming slowdown/stoppage of its growth, legitimates investors' concerns. The streaming-media company has always been in the business of amassing users with the idea that if it had a big enough audience, it could make money.

That might be true, but a drop in listeners quarter over quarter coupled with heightened competition and the rumors of another major player getting into the subscription streaming music game, rightly concerned investors. Pandora has always been a bit shaky as a business, and if it's not steadily growing, its future becomes more suspect.

Now what: Pandora will ultimately benefit from connected cars -- vehicles that have a built-in Internet connection -- but that's not a near-term solution to its problems. To allay investor fears, especially with the giants it does and might compete with, the company needs to get back to adding subscribers.

The company has plans to do that by tweaking its offerings, as well as by expanding internationally. It could also quell some concerns by growing revenue at Ticketfly, the ticketing service the company purchased in October.

"Ticketfly will be truly transformative, extending our long-standing strength in music discovery to the large and fast-growing world of live events," the company said in its Q3 release.

Pandora can turn around, but it must solve its unproven business model, return to growth, and diversify its revenue beyond advertising and subscriptions. The company releases its Q4 numbers on Feb. 11.

Daniel Kline has no position in any stocks mentioned. He almost never uses Pandora now that he pays for an unlimited streaming service. The Motley Fool owns shares of and recommends 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.