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Spotify
(NYSE:SPOT)
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Rating:80Outperform
Price Target:
$604.00
▲(9.31% Upside)
Action:Reiterated
Date:10/22/26
The score is driven primarily by the sharp improvement in profitability, margins, and cash generation alongside a low-leverage balance sheet. Earnings-call guidance reinforced continued margin expansion and solid growth expectations, supporting the outlook. Offsetting factors are a more neutral technical setup and a relatively demanding P/E with no dividend yield support in the provided data.
Positive Factors
User and Revenue Growth
Spotify continues to expand both its audience and paying subscriber base, supporting recurring subscription revenue and broader advertising reach. Growth across regions and a long record of annual subscriber additions indicate a durable platform expansion opportunity rather than a one-quarter improvement.
Negative Factors
Moderating Audience Growth
A slower increase in monthly active users could constrain future advertising inventory, engagement growth, and the pace of premium subscriber conversion. The moderation makes continued product execution and international expansion more important to sustain Spotify’s long-term growth trajectory.
Read all positive and negative factors
Positive Factors
Negative Factors
User and Revenue Growth
Spotify continues to expand both its audience and paying subscriber base, supporting recurring subscription revenue and broader advertising reach. Growth across regions and a long record of annual subscriber additions indicate a durable platform expansion opportunity rather than a one-quarter improvement.
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.
Data provided by:
The Fly
The FlySpotify (SPOT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$108.31B
Dividend YieldN/A
Average Volume (3M)1.46M
Price to Earnings (P/E)28.8
Beta (1Y)0.92
Revenue Growth16.91%
EPS Growth346.36%
CountryUS
Employees7,000
SectorCommunication Services
Sector Strength97
IndustryInternet Content & Information
Share Statistics
EPS (TTM)16.22
Shares Outstanding205,882,340
10 Day Avg. Volume1,483,097
30 Day Avg. Volume1,457,505
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 Cap0.79
Enterprise Value/Revenue4.73
Enterprise Value/Gross Profit14.42
Enterprise Value/Ebitda23.55
Forecast
1Y Price Target
$604.14Price Target Upside9.33% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering23
EPS Forecast (FY)12.16
Revenue Forecast (FY)$19.53B
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)
| 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
88
Very Positive
Balance Sheet
86
Very Positive
Cash Flow
83
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 18.11B | 17.19B | 15.67B | 13.25B | 11.73B | 9.67B |
| Gross Profit | 5.94B | 5.50B | 4.72B | 3.40B | 2.93B | 2.59B |
| EBITDA | 3.64B | 2.36B | 1.50B | -309.00M | -158.00M | 416.00M |
| Net Income | 3.34B | 2.21B | 1.14B | -532.00M | -430.00M | -34.00M |
Balance Sheet | ||||||
| Total Assets | 13.75B | 15.02B | 12.01B | 8.35B | 7.64B | 7.17B |
| Cash, Cash Equivalents and Short-Term Investments | 9.39B | 9.47B | 7.45B | 4.21B | 3.35B | 3.50B |
| Total Debt | 466.00M | 1.96B | 2.08B | 1.70B | 1.68B | 1.78B |
| Total Liabilities | 5.36B | 6.69B | 6.48B | 5.82B | 5.24B | 5.05B |
| Stockholders Equity | 8.38B | 8.33B | 5.53B | 2.52B | 2.40B | 2.12B |
Cash Flow | ||||||
| Free Cash Flow | 3.27B | 2.87B | 2.28B | 674.00M | 21.00M | 276.00M |
| Operating Cash Flow | 3.34B | 2.93B | 2.30B | 680.00M | 46.00M | 361.00M |
| Investing Cash Flow | -273.00M | -1.78B | -1.49B | -217.00M | -423.00M | -187.00M |
| Financing Cash Flow | -2.35B | -381.00M | 729.00M | 234.00M | -40.00M | 1.25B |
Spotify Technical Analysis
Positive
552.57
Price Trends
522.41
Positive
503.18
Positive
496.48
Positive
Market Momentum
3.00
Negative
53.51
Neutral
54.51
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 510.91, above the 50-day MA of 522.41, and above the 200-day MA of 496.48, indicating a bullish trend. The MACD of 3.00 indicates Negative momentum. The RSI at 53.51 is Neutral, neither overbought nor oversold. The STOCH value of 54.51 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 | $4.14T | 16.43 | 50.84% | 0.26% | 20.23% | 112.71% | |
80 Outperform | $108.31B | 28.83 | 41.09% | ― | 16.91% | 346.36% | |
77 Outperform | $1.77T | 23.49 | 30.27% | 0.30% | 27.65% | -5.02% | |
75 Outperform | $12.47B | 9.79 | 11.23% | 2.84% | 15.72% | -8.96% | |
67 Neutral | $5.74B | 25.07 | 9.84% | ― | 10.34% | 620.66% | |
61 Neutral | $10.79B | -34.40 | -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
525.34
-148.52
-22.04%
META
Meta Platforms
697.52
-34.00
-4.65%
GOOGL
Alphabet Class A
334.76
82.34
32.62%
SNAP
Snap
6.35
-1.52
-19.31%
BILI
Bilibili
13.60
-15.35
-53.02%
TME
Tencent Music Entertainment Group
8.44
-13.80
-62.05%
Spotify Corporate Events
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.