Pandora (NYSE:P)  has launched partnerships with Snap (NYSE:SNAP)  and AT&T Inc (NYSE:T) that look poised to boost Pandora’s financial results and Pandora stock over the medium term.

I believe that, within the next year, the company will make many more such deals, further improving Pandora’s bottom line and lifting Pandora stock even higher over the long-term.

Within five years, Pandora stock should triple from current levels.

Deals and Pandora Stock

Under the deal with AT&T, the company’s customers who subscribe to its new unlimited data plan will receive “Pandora Premium or one of a few other streaming services for free,” Marketwatch reported.

SunTrust Robinson Humphrey analyst Matthew Thornton estimated that the transaction could enable Pandora to increase the number of people subscribing to Pandora Premium by 500,000 by June 2019, MarketWatch noted.

Other companies could sign similar deals with Pandora.

For example, a cable company like Comcast Corporation (NASDAQ:CMCSA), a health club company such as Planet Fitness, Inc (NYSE:PLNT), and even car companies could make similar deals to entice customers.

I believe its possible that, by 2021, such deals could cumulatively lift Pandora Premium’s subscriber totals by 2.5 million.

If that happens, Pandora’s annual subscription revenue would jump by about $300 million, assuming that the cost of subscribing remains at the current $9.99 per month.

The Future for Pandora Stock

In all of 2017, Pandora’s subscription revenue was just $314 million. So, based on my theory, partnerships alone could increase the company’s annual subscription revenue by almost 100% in 2021 compared with 2017.

Assuming that the EBITDA margin on the additional subscription revenue would be  80%, Pandora’s EBITDA would rise by $240 million.

As a result, the company’s EBITDA , assuming no other changes compared with 2017, would be positive $115 million, versus negative $125 million.

Needless to say, investors would be thrilled by these changes, and many more would want to buy Pandora stock. Consequently, Pandora stock would rally sharply by 2021.

Pandora also recently announced a partnership with Snapchat. Under the deal, Pandora subscribers will be able to send music to other people using Snapchat.

As Market Realist pointed out, “The partnership with Snapchat gives Pandora an opportunity to reach a larger audience, which could, in turn, expand its revenue opportunities.”

In addition to the increased ad revenue that the larger audience will enable Pandora to generate, the streaming music service will be able to market its subscription service to more consumers.

As a result, the company’s partnership with Snapchat will cause its subscription revenue to rise.

Moreover, Pandora should be able to sign similar partnership deals with other companies.

For example, Facebook Inc (NASDAQ:FB) will probably look to sign a similar deal with Pandora. Facebook has had its problems keeping younger Americans interested in its website.

According to Digital Music News, although Pandora’s market share among the youngest listeners has dropped in recent years, as of 2017 it was still pretty much neck-and-neck with Spotify for first place in the 12-24 year old demographic.

Partnering with Pandora would help Facebook entice many more young people to keep coming back to its website.

And of course, such a deal would greatly increase Pandora’s listening hours, significantly boosting its  advertising and subscription revenue.

Pandora could also probably reach a partnership deal with Amazon.com (NASDAQ:AMZN). Specifically, Pandora could promote Amazon’s Alexa service and Alexa could promote Pandora.

Perhaps Pandora could play free ads for Alexa and Amazon could make Pandora the default music streaming service on Alexa. Pandora could also reach similar partnership deals with Fitbit (NYSE:FIT) and other wearables makers.

I believe that, over the next two years, these partnership deals could easily raise Pandora’s revenue by 20%-30% and increase its bottom line by at least 50%.

Trading at an enterprise value of around $1 billion and a price to sales ratio of about 1.4, Pandora stock is quite affordable and does not price in its many growth opportunities.

Investors should definitely buy Pandora stock at current levels.

As of this writing, Larry Ramer owned shares of Pandora stock.