Pandora Media (P) recently announced that Suzuki and Nissan will be integrating its service in their vehicles. This takes the total number of Pandora partnerships with automotive brands to 18 and with aftermarket manufacturers to seven.

The automotive brands include big names such as General Motors (GM) and Ford (F). This can be a key channel for Pandora to expand mainly because about half of radio consumption happens in vehicles; however, it's not going to be an easy road.

Sirius XM (SIRI) has established a foothold in the automotive segment where it continues to gain subscribers both in new and pre-owned vehicle markets. However, unlike Sirius XM, Pandora is free. Given that Sirius XM is able to convert roughly 45% of new vehicle owners, Pandora has an opportunity to tap the remaining market.

This year, about 14 million new vehicles will be sold, thereby presenting an opportunity for Pandora to expand further. Clear Channel Radio has started installing its iHeartRadio app in vehicles, and this can pose a competitive challenge for Pandora. iHeartRadio essentially works on the same principle as Pandora, only with a wider choice of songs and artists.

Our price estimate for Pandora stands at $9.89, implying a discount of 5% the current market price.