Spotify (SPOT) has announced the acquisition of Podz, gaining access to valuable technology that people can use to generate preview clips of podcasts. The acquisition also underscores the company’s push to enhance users’ experience in the discovery of podcasts.
Podz joins Spotify with a team expected to enhance the podcast experience on the platform. Additionally, the audio streaming and media service provider is banking on Podz technology to help accelerate the growth of its podcast offerings globally.
“Powered by state-of-the-art machine learning technology, Podz generates high-quality clips that give users the opportunity to preview key moments from podcast episodes, encouraging them to discover and listen to new podcasts,” Spotify said in a press release.
Spotify expects Podz’s technology to make it easier for people to find the right podcasts to listen to while allowing creators to build a highly interactive fan base. Podz technology will be integrated into the Spotify experience, and people should start seeing new features before year-end. (See Spotify stock chart on TipRanks).
Evercore ISI analyst Mark Mahaney recently reiterated a Buy rating on the stock with a $375 price target, implying 51.43% upside potential to current levels. The Buy rating follows U.S and U.K Online Audio Surveys showing Spotify’s strength and podcast traction in the U.S., and a “generally positive” sentiment in the U.K.
Mahaney calls CEO Daniel Ek’s goal of reaching 1 billion users of the platform by 2025 an “aggressive, but plausible goal”. According to Mahaney, the increase could see the audio streaming and media service provider’s enterprise value doubling over the next three years.
Consensus among analysts is a Moderate Buy based on 10 Buys and 6 Holds. The Spotify average analyst price target of $341.15 implies 37.76% upside potential to current levels.
SPOT scores a 9 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.
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