Jessica Reif Ehrlich, an analyst from Bank of America Securities, maintained the Buy rating on Spotify (SPOT – Research Report). The associated price target remains the same with $700.00.
Jessica Reif Ehrlich’s rating is based on Spotify’s strong financial performance and strategic growth initiatives. The company reported a solid first quarter with gross margins and operating income surpassing expectations, while revenue and monthly active users were in line with forecasts. The growth in premium subscribers and favorable conditions in audiobooks, music, and podcasting contributed to the positive outlook.
Looking ahead, Ehrlich anticipates several growth drivers for Spotify, including the expansion of programmatic advertising, pricing power, and the potential of the Super Premium tier. Despite some concerns about ad-supported users, Ehrlich believes these are overstated, as Spotify is maintaining spending discipline. The company’s strategic investments and new business ventures, such as audiobooks and education, are expected to drive future profitability and free cash flow, supporting the Buy rating and a price objective of $700.
In another report released today, Barclays also maintained a Buy rating on the stock with a $650.00 price target.
SPOT’s price has also changed dramatically for the past six months – from $391.230 to $576.940, which is a 47.47% increase.