Wedbush analyst Michael Pachter came out today with a cautious stance around Ticketfly acquisition by Pandora Media Inc (NYSE:P). The analyst reduced his price target for Pandora to $26, from his earlier target of $27, while reiterating an Outperform rating on the stock. As a reminder, Pandora will acquire Ticketfly, a ticket agency focused on middle-market concerts, for $450 million in a cash/stock transaction.

Pachter wrote, “While we see some strategic fit, we think that Pandora could have achieved most of the benefit by partnering with Ticketfly. We see little value added for Pandora beyond promoting artists, and note that Pandora has limited experience or aptitude in promoting or hosting concerts. Rather than spend $450 million (10% of Pandora’s market capitalization), we believe that Pandora could have achieved most of the benefits by simply partnering with Ticketfly and sharing revenue.”

Furthermore, “With only $55 million in revenue, we think that Ticketfly commanded a premium that far exceeds its value. Even if Pandora were to double revenues, we estimate that EBITDA would be no more than 20%, suggesting that Pandora paid at least two to four times what Ticketfly would command from a competitive bid. Our model assumes zero contribution in 2016.”

“We are lowering our price target $1 to $26 to reflect share dilution, reduced cash, and limited profit potential from the acquisition. We continue to think that Pandora users should grow, and we think it appropriate to value the company based on its number of users,” the analyst concluded.

According to, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Michael Pachter has a total average return of -1.8% and a 45.0% success rate. Pachter has a 9.7% average return when recommending P, and is ranked #3249 out of 3772 analysts.

Out of the 31 analysts polled by TipRanks, 21 rate Pandora Media Inc stock a Buy, 9 rate the stock a Hold and 1 recommends Sell. With a return potential of 17.3%, the stock’s consensus target price stands at $23.84.