Spotify user growth masked by currency headwinds, says Canaccord

Canaccord analyst Maria Ripps says Spotify reported “generally solid” Q2 results as advertising-supported monthly active users came in well ahead of expectations while revenue was slightly below. The shares are trading lower as investors are seemingly disappointed in the forward revenue outlook, the analyst tells investors in a research note. However, the firm remains encouraged by Spotify’s “strong” user growth and profitability progress and thinks that price increases and an improving ad backdrop should support accelerating revenue growth in Q4 and 2024. It says Spotify’s user growth and pricing power is being masked by currency headwinds. Canaccord keeps a Buy rating on the shares with a $170 price target.