For investors in Pandora Media Inc (NYSE:P), the tune has been mostly depressing. Just look at the latest quarterly report — yet again, the company disappointed the Street and P stock plunged, losing about 19% of its value.

Unfortunately, this was not a one-off. Consider that Pandora has had a knack for missing the Street’s expectations. And yes, the impact on the stock has been grueling. For the past year, Pandora stock has dropped about 60%.

Despite this, might there still be hope? Perhaps P stock can get back on track?

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To see, let’s take a look at the pros and cons:

Pandora Stock Pros

Massive Market Opportunity. Pandora is essentially attempting to disrupt the traditional radio industry. To put this into perspective, about 92% of the U.S. population — 240 million people — listens to radio each week. And the engagement is high. Keep in mind that the typical person spends about 18 hours per week listening to radio. Yet for P stock, the opportunity is much more. After all, the company’s mobile apps can be used anywhere, not just in a car or home. It also helps that Pandora provides a personalized experience. This is done with the use of its Music Genome Project technology, which uses Big Data to deliver the kind of music people like.

Monetization. Pandora has been investing heavily in its infrastructure to deliver targeted local ads, such as with systems for measurement and analytics. There has also been aggressive hiring of a local sales force. So far, Pandora is getting traction. In the fourth quarter, the company saw a 90% spike in local ad spending to $49.9 million. But Pandora is also developing its own programmatic platform, which will allow for automated buying of ads. To this end, the company recently hired an NBCU executive as its new vice president of programmatic sales.

Valuation. For a top mobile operator, P stock does look cheap. The price-to-sales multiple is currently at 3.4X. So how does this compare? Well, here’s a look at other mobile companies that rely on ad revenues:

Pandora Stock Cons

Competition. It’s certainly intense. Besides a myriad of startups, there are mega players in the market, such as Apple Inc. (NASDAQ:AAPL), Amazon.com, Inc. (NASDAQ:AMZN), Google Inc. (NASDAQ:GOOG, NASDAQ:GOOGL), Spotify and iHeartMedia Inc (OTCMKTS:IHRT). Apple could prove the most problematic. The company not only has seemingly unlimited resources but also a need to find a way to protect its iTunes franchise. Apple also has the synergies of Beats Music, which is a strong brand. According to a recent report, it looks like the company is planning on launching a default app for both mobile devices and the desktop. There’s even buzz that Apple may develop an app for Android as well.

Content Costs. These are substantial, coming to about 43% of overall revenues. While Pandora has been effective in driving content costs lower over time, this could easily be reversed. Keep in mind that Pandora is permitted to operate as a radio service under a federal statutory license. The problem? The current agreement will end at the end of this year. However, there is no clear indication what the new rates will be. No doubt, this has led to investor uncertainty and has weighed on Pandora stock.

Disappointment. Pandora stock has been a roller coaster because of the volatility in the financials. Again, the fourth quarter was clear example of this. Revenues came in at $268 million, which was below the Street expectations of $276.5 million. As for the outlook, Pandora sees revenues of $220 million to $225 million for the first quarter of 2015. Yet analysts were expecting a more robust $229.4 million. True, Pandora may be lowballing the forecast. But even so, the fact remains that Pandora stock has seen lots of volatility over the past few years. Given this, investors may be gun-shy — which may keep a lid on the stock.

Pandora Stock Verdict

Even with the tough competition, Pandora has done a pretty good job of maintaining its popularity with users. During the past year, the company’s share of the radio listening market went from 8.6% to 9.7%.

It is also encouraging that Pandora has continued to invest in its advertising infrastructure. The efforts in programmatic buying also are encouraging.

While all this is good, there are still some big issues. Let’s face it, the competition could ultimately dent the progress of Pandora. At the same time, there could be a big change in Pandora’s economics when the new content licensing requirements are announced. Given the aggressive history of the music industry, it’s reasonable to suspect that it will be rough on Pandora.

So should you buy Pandora stock? For now, it is probably better to wait, even though the company has a great service and the valuation is attractive.

Tom Taulli runs the InvestorPlace blog IPO Playbook. He is also the author of High-Profit IPO Strategies, All About Commodities and All About Short Selling. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.

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