Spotify added to ‘Tactical Underperform’ list at Evercore ISI

Evercore ISI analyst Mark Mahaney is adding Spotify to the firm’s “Tactical Underperform” list ahead of earnings based on concern that given the 40% rally in shares year-to-date that expectations are highly elevated into the print. The firm sees two specific challenges to current Street estimates: one, that Q1 operating income estimates likely do not fully reflect the impact from unanticipated social charges; and two that the Q2 MAU outlook for 20M net adds “seems aggressive.” The firm, which believes its own outlook for 10-15M net adds is “more reasonable,” has an Outperform rating on Spotify shares.