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Spotify
(NYSE:SPOT)
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Rating:79Outperform
Price Target:
$669.00
▲(21.07% Upside)
Action:Reiterated
Date:10/24/26
Overall score reflects strong financial execution and balance-sheet strength, reinforced by a very positive earnings call and margin-focused guidance. The rating is tempered by premium valuation and technically overbought signals, plus a recent slowdown in free cash flow growth and moderating revenue growth.
Positive Factors
Profitability and Margin Expansion
Spotify’s sharp move from losses to strong operating and net profitability indicates meaningful improvement in its economic model. Higher margins create more capacity to invest in product development, creator tools and international growth while strengthening earnings resilience over the next several quarters.
Negative Factors
Moderating Revenue Growth
Spotify remains a growing business, but slower recent top-line expansion may make it harder to sustain the pace of operating leverage and shareholder returns achieved during the turnaround. Moderating growth also increases the importance of successful monetization from newer products and markets.
Read all positive and negative factors
Positive Factors
Negative Factors
Profitability and Margin Expansion
Spotify’s sharp move from losses to strong operating and net profitability indicates meaningful improvement in its economic model. Higher margins create more capacity to invest in product development, creator tools and international growth while strengthening earnings resilience over the next several quarters.
Read all positive factors
Spotify Key Performance Indicators (KPIs)
Any
Revenue by Geography
Breaks down sales across regions to reveal where Spotify is strongest, where growth is accelerating, and where it’s exposed to slowing ad markets or weaker subscription uptake. Heavy dependence on a few markets increases risk, while expanding revenue in emerging regions points to future scale.
Breaks down sales across regions to reveal where Spotify is strongest, where growth is accelerating, and where it’s exposed to slowing ad markets or weaker subscription uptake. Heavy dependence on a few markets increases risk, while expanding revenue in emerging regions points to future scale.
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The Fly
The FlySpotify (SPOT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$120.28B
Dividend YieldN/A
Average Volume (3M)1.65M
Price to Earnings (P/E)35.3
Beta (1Y)0.90
Revenue Growth16.96%
EPS Growth116.97%
CountryUS
Employees7,000
SectorCommunication Services
Sector Strength97
IndustryInternet Content & Information
Share Statistics
EPS (TTM)14.76
Shares Outstanding205,882,340
10 Day Avg. Volume1,979,041
30 Day Avg. Volume1,652,586
Financial Highlights & Ratios
PEG Ratio0.51
Price to Book (P/B)12.19
Price to Sales (P/S)5.91
P/FCF Ratio35.35
Enterprise Value/Market Cap0.71
Enterprise Value/Revenue4.38
Enterprise Value/Gross Profit13.24
Enterprise Value/Ebitda23.86
Forecast
1Y Price Target
$634.36Price Target Upside14.80% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering24
EPS Forecast (FY)11.91
Revenue Forecast (FY)$19.52B
Spotify Business Overview & Revenue Model
Company Description
Spotify Technology S.A., together with its subsidiaries, provides audio streaming subscription services worldwide. It operates in two segments, Premium and Ad-Supported. The Premium segment offers online and offline streaming access to its catalog...
How the Company Makes Money
Spotify primarily makes money through two revenue segments: Premium subscriptions and ad-supported (free) listening.
1) Premium subscriptions: Spotify’s largest revenue stream comes from recurring subscription fees paid by users for its Premium t...
Spotify Earnings Call Summary
Earnings Call Date:Oct 22, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Feb 09, 2027
Earnings Call Sentiment Positive
The call was strongly positive. Spotify reported revenue, subscriber growth, gross margin, operating income, and free cash flow at or above expectations; highlighted improving advertising momentum, expanding audiobook and creator offerings, strong AI adoption, and continued investment returns; and provided constructive fourth-quarter guidance. The main challenges were that advertising growth remains at 9% rather than double digits, MAU growth is below last year's record pace, social charges were above forecast, and 2027 guidance was not yet available.Positive Updates
Revenue and User Growth Met or Exceeded Guidance
Third-quarter total revenue was EUR 5 billion, up 14% year over year at constant currency and in line with guidance. MAU reached 788 million, up 11% year over year and in line with guidance, while subscribers reached 306 million after adding six million net subscribers, exceeding guidance by one million.
Negative Updates
Advertising Growth Remains Below Double Digits
Although advertising growth improved to 9% in the third quarter, management described the business as coming out of a longer period of single-digit growth and said it is still progressing toward double-digit growth in the fourth quarter.
Read all updates
Q3-2026 Updates
Positive
Negative
Revenue and User Growth Met or Exceeded Guidance
Third-quarter total revenue was EUR 5 billion, up 14% year over year at constant currency and in line with guidance. MAU reached 788 million, up 11% year over year and in line with guidance, while subscribers reached 306 million after adding six million net subscribers, exceeding guidance by one million.
Read all positive updates
Company Guidance
For quarter four, Spotify is forecasting MAU of 818 million, an increase of 30 million from quarter three, and 316 million subscribers, or a net addition of 10 million, with healthy growth across all regions; total revenue is forecast at EUR 5.2 billion, reflecting a year-over-year ARPU increase of 4.5% - 5%, advertising is expected to continue progress towards double-digit growth, gross margin is expected to be 33.8%, approximately 70 basis points above prior year, and operating income is guided to EUR 820 million. The quarter four outlook implies full-year gross margin expansion of approximately 130 basis points compared to 2025, includes expansion of audiobooks to more than 180 markets and the Spotify Partner Program to more than 50 markets, and OpEx growth is expected to moderate in Q4 and into 2027; it is too early to give guidance on 2027.Spotify Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
88
Very Positive
Cash Flow
74
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 19.56B | 17.19B | 15.67B | 13.25B | 11.73B | 9.67B |
| Gross Profit | 6.47B | 5.50B | 4.72B | 3.40B | 2.93B | 2.59B |
| EBITDA | 3.59B | 2.36B | 1.50B | -309.00M | -158.00M | 416.00M |
| Net Income | 3.04B | 2.21B | 1.14B | -532.00M | -430.00M | -34.00M |
Balance Sheet | ||||||
| Total Assets | 16.26B | 15.02B | 12.01B | 8.35B | 7.64B | 7.17B |
| Cash, Cash Equivalents and Short-Term Investments | 11.23B | 9.47B | 7.45B | 4.21B | 3.35B | 3.50B |
| Total Debt | 513.40M | 1.96B | 2.08B | 1.70B | 1.68B | 1.78B |
| Total Liabilities | 6.33B | 6.69B | 6.48B | 5.82B | 5.24B | 5.05B |
| Stockholders Equity | 9.93B | 8.33B | 5.53B | 2.52B | 2.40B | 2.12B |
Cash Flow | ||||||
| Free Cash Flow | 3.25B | 2.87B | 2.28B | 674.00M | 21.00M | 276.00M |
| Operating Cash Flow | 3.31B | 2.93B | 2.30B | 680.00M | 46.00M | 361.00M |
| Investing Cash Flow | -252.43M | -1.78B | -1.49B | -217.00M | -423.00M | -187.00M |
| Financing Cash Flow | -2.55B | -381.00M | 729.00M | 234.00M | -40.00M | 1.25B |
Spotify Technical Analysis
Positive
552.57
Price Trends
526.01
Positive
504.76
Positive
496.61
Positive
Market Momentum
11.43
Negative
70.61
Negative
78.40
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SPOT, the sentiment is Positive. The current price of 552.57 is above the 20-day moving average (MA) of 518.23, above the 50-day MA of 526.01, and above the 200-day MA of 496.61, indicating a bullish trend. The MACD of 11.43 indicates Negative momentum. The RSI at 70.61 is Negative, neither overbought nor oversold. The STOCH value of 78.40 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SPOT.
Spotify Risk Analysis
Spotify disclosed 57 risk factors in its most recent earnings report. Spotify reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Spotify Peers Comparison
UnderperformOutperform
Sector (60)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
83 Outperform | $3.90T | 15.75 | 50.84% | 0.27% | 20.23% | 112.71% | |
79 Outperform | $120.28B | 35.32 | 35.04% | ― | 16.96% | 116.97% | |
77 Outperform | $1.64T | 21.64 | 30.27% | 0.33% | 27.53% | 28.01% | |
75 Outperform | $12.57B | 10.01 | 11.23% | 2.82% | 15.72% | -8.96% | |
67 Neutral | $5.67B | 24.71 | 9.84% | ― | 10.34% | 620.66% | |
61 Neutral | $10.72B | -34.34 | -14.61% | ― | 12.65% | 42.94% | |
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% |
* Communication Services Sector Average
SPOT
Spotify
584.22
-73.58
-11.19%
META
Meta Platforms
642.62
-105.66
-14.12%
GOOGL
Alphabet Class A
320.21
51.64
19.23%
SNAP
Snap
6.34
-1.57
-19.85%
BILI
Bilibili
13.48
-16.50
-55.04%
TME
Tencent Music Entertainment Group
8.51
-14.60
-63.17%
Spotify Corporate Events
Spotify Posts Strong Revenue and Operating Profit Growth in Q3 2026 Filing
Oct 22, 2026
Spotify reported interim condensed consolidated financial results for the three and nine months ended September 30, 2026, showing continued top-line growth and improved profitability. Revenue rose to €4,969 million for the quarter and €...
Spotify Q3 2026 Results Beat Guidance as Users, Revenue and Margins Climb
Oct 22, 2026
Spotify Technology S.A. is a global audio streaming leader in music, podcasts and audiobooks, operating a dual premium subscription and ad-supported model aimed at maximizing user engagement and monetization. The company is expanding creator reven...
Spotify Announces Resignation of Long-Serving Board Member Heidi O’Neill
Sep 3, 2026
On September 3, 2026, Spotify Technology S.A. announced that Heidi O’Neill resigned from its Board of Directors, effective the same day, with the company stating her departure was not the result of any disagreement. Founder and Executive Cha...
Spotify Boosts Share Buyback Authorization to $2.2 Billion
Aug 20, 2026
On August 20, 2026, Spotify Technology S.A. announced that its Board of Directors had approved a $1.5 billion increase to the company’s existing share repurchase program. With $723 million still available under the prior authorization, the m...
Spotify Posts Strong Q2 2026 Earnings With Return to Profitability
Aug 4, 2026
Spotify Technology S.A. has filed a Form 6-K with the U.S. Securities and Exchange Commission for August 2026, publishing unaudited interim condensed consolidated financial statements for the three and six months ended June 30, 2026. The release s...
Spotify Hits 300 Million Premium Subscribers as Q2 2026 Margins Reach Record High
Aug 4, 2026
On August 4, 2026, Spotify reported Q2 2026 results showing solid expansion in both users and financial performance, with Monthly Active Users rising 12% year-on-year to 777 million and premium subscribers climbing 9% to a milestone 300 million. T...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.