Analysts weigh in on internet giants Netflix, Inc. (NASDAQ:NFLX) and Pandora Media Inc (NYSE:P) as one company experiences strong Q1 subscriber gains following new content releases and the other shifts strategies along with leadership in order to increase its competitive presence.

Netflix, Inc.

After a recent study conducted by Baird Equity research team, analysts found that Netflix experienced a strong Q1 subscriber growth thanks to new content on the site as indicated by a survey conducted during the quarter. Putting the promising data aside, analyst William Power maintains a neutral rating on the stock with a price target of $115, noting impending pressure on domestic subscriber growth levels, high international expectations, rising costs, and competition.

In line with solid Q1 results, Netflix’s US subscriber based reached a penetration level of 51%, which is an improvement from 46-47% over the surveys conducted in the previous quarters. The late 2015 release of Making a Murderer along with a new season of House of Cards and Daredevil were likely contributors to the strong Q1 results. Despite the strong penetration mark, the 500 bps increase trailed the sequential increase in a survey conducted one year prior. Following strong results, Power forecasts Q1 domestic additions of 1.75 million.

Despite strong user growth, Power believes that subscriber growth for 2H16 “remains at risk” as Netflix has already announced price increases, which will take effect in May and could increase “modestly” in the second half of the year. Power believes that the additional content released on Netflix can “limit the impact” of decelerating user growth, but this slow down remains a risk. Power is forecasting the company’s international launch to bring on 4.4 million new net additions, a number that should represent 130 new countries in Q1, compared to 4.04 million additions in Q4 and 2.6 million a year ago.

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst William Power has a yearly average return of 2.4% and a 50% success rate. Power is ranked #1051 out of 3814 analysts. 

Pandora Media Inc

Pandora announced a change in leadership as CEO Brian McAndrews will step down and founder Tim Westergren, founder and former CEO, will return from his advisory role to CEO. In light of the news, BMO Capital Markets analyst Daniel Salmon reiterates a Market Perform rating on the stock with a price target of $10.

The stock’s 12% dip yesterday, according to Salmon, reflected the investor assumption that a CEO change no longer meant that Pandora would be bought out. Salmon believes, however, that the change in CEO does not change his fundamental view that Pandora will continue to execute a “three-part transformative strategy through 2016, namely 1) sign more direct deals with labels; 2) roll out an on-demand product before the end of the year, and; 3) begin a global expansion in 2017.” Salmons thinks the CEO change is a way for Pandora to bring back a leader with a “deeper connection to the company.”

Salmon remains on the fence with Pandora and calls it a “wait and see” stock. He notes that Pandora’s strategy has not been tested in the past, but also points out that core streaming competition remains strong. Lastly, the company’s long-term margin profile remains uncertain as AMP and TicketFly become more important players in the market.

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Daniel Salmon has a yearly average return of 5.7% and a 65% success rate. Salmon is ranked #626 out of 3814 analysts.