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Spotify Technology Today

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Spotify Technology

$ 642.77 +40.51 (+6.73%)

As of 2/2/2025 21:59

52-week range

$ 286.21

▼

$ 653.32

P/e ratio.

108.03

Value is valuable

$ 604.76

Spotify Technology NYSE: Spot They delivered their quarterly income before the market opened on April 29. Investors hoped for a report that would approximately approach the profit of Netflix Inc. NASDAQ: NFLXWhich confirmed the bull forecast for the shares of NFLX.

Spotify lost it. The report was in no way bad, but investors often hear what they want to hear. Therefore, when the company announced a small miss in operating income and other figures that met but did not exceed the company’s management, the shares fell by more than 8% immediately after the report.

However, in the following days, Spot Stock restored almost all this loss. This makes investors ask if the action will push the action to the new record maximum. There is good reason to believe that this can.

The CEO says to ignore the noise

According to the chief executive director of Spotify, Daniel Eka, there may be some kind of short-term noise in a wider economy, however, E.K. He believes that there is nothing to make it something other than optimistic about the long-term prospects of Spotify.

In fact, EK noted that the Spotify market continues to grow, and the company occupies a large share of this market. In addition, the company reaches this growth with increasing prices.

This growth is reflected in some outstanding indicators, such as

• 15% compared to the same period last year (YOY) Revenue growth

• Monthly active users (MAUS) grew by 10% year.

• Premium -class subscribers grew by 12%.

• Free cash flow record (FCF)

And remember that investors reacted to a small passage of operational income. The other side of this story is that operating income increased by 203% in the quarter.

Freemium can reduce both sides

Spotify streaming service is considered immune from tariff problems and offers good value to consumers even during economic uncertainty. As Netflix showed, consumers will accept advertising at the right price. For Spotify users, this low price is free.

At the conference, the EK has noted that this plan helps to keep customers on the channel even in indefinite times. The company has made significant investments to update its monetization capabilities for this category of users.

These investments include Spotify AD Exchange (SAX), which is equipped with a software advertising model that optimizes the purchase of advertising with improved addressing and measurement tools. Spotify also expanded Spotify’s advertising, her self-service platform, including Ads Gen Ai, which gives advertisers access to the Ai-Usolen AI scenario and voice creation.

These investments may be why investors were disappointed with a consistent drop in income supported by AD. But upon closer examination, investors saw that this category of revenue increased by 8% compared to last year. In addition, the revenue supported by advertising is usually increasing in the fourth quarter of the company that covers the holidays.

Analysts draw a mixed picture

After bouncing back, the spots are consolidated around $ 600. The conclusion is that, like many business services, Spotify growth matures, which means that investors and analysts increase their expectations. This is especially true for shares that is traded more than 100 times. Spotify is a product, and users will pay only a certain price for the service.

From the moment of earnings of the mood of analysts have been mixed with lower and higher prices. Nevertheless, even analysts who reduce their goals, still have the target price much higher than the consensus price of $ 606.71. This combination involves a rollback from current levels. However, such a lower step can allow investors to get at a more attractive price.

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