Spotify za poslední měsíc přidal asi 16 % po zveřejnění výsledků za 2. čtvrtletí, kdy tržby vzrostly o 14 % na 5,55 mld. USD, ale zisk na akcii zaostal za odhady.
It has been about a month since the last earnings report for Spotify (SPOT - Free Report) . Shares have added about 16% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Spotify due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its latest earnings report in order to get a better handle on the important catalysts.
Spotify's Q2 EarningsSpotify Technology S.A. reported second-quarter 2026 earnings of $3.03 per share, missing the Zacks Consensus Estimate of $3.27 by 7.3%. The company had incurred a loss in the year-ago quarter. Higher marketing, cloud and artificial intelligence spending weighed on the bottom line.
Revenues of $5.55 billion increased 14% year over year on a reported basis and 15% at constant currency. The figure beat the consensus estimate by a slight margin. Premium subscribers reached 300 million, exceeding management’s guidance by one million.
SPOT's User Growth Reaches New HighsMonthly active users, or MAUs, increased 12% year over year and 2% sequentially to 777 million. Spotify added 16 million MAUs during the quarter, one million below its guidance. Growth was recorded across all regions, with notable strength in Europe and North America.
Premium subscribers rose 9% year over year and 2% from the prior quarter. Net additions totaled seven million, exceeding the company’s forecast by one million. Ad-supported MAUs advanced 14% year over year to 494 million, reflecting continued expansion of Spotify’s global audience.
Spotify's Premium Revenues Gain MomentumPremium revenues increased 15% year over year to €4.33 billion. On a constant-currency basis, revenues grew 16%, supported by subscriber gains and higher pricing. Premium average revenue per user increased 7% to €4.89, or 7.4% excluding currency effects.
The benefits of price increases were partly offset by product and geographic mix. Management also highlighted improving engagement, with active days among global subscribers increasing. The company continues to add value through services such as Reserved concert-ticket access, personalized podcasts and additional audiobook offerings.
SPOT's Margins Expand Despite SpendingGross profit increased 21% year over year to €1.60 billion. Gross margin expanded 193 basis points to a record 33.4%, topping management’s forecast of 33.1%. Premium gross margin reached 34.9%, helped by revenue growth outpacing music costs, net of marketplace programs, audiobook expenses and video-podcast costs.
Operating expenses increased 3% to €941 million. Excluding currency movements and social charges, expenses rose 19%, mainly because of temporary investments in marketing, cloud infrastructure and AI initiatives. Operating income climbed 61% to €655 million, while operating margin expanded to 13.7% from 9.7%.
Spotify's Ad Business Starts to StabilizeAd-supported revenues increased 1% year over year to €446 million, or 3% at constant currency. Growth in music-advertising impressions was partially offset by softer pricing. Podcast advertising benefited from sponsorship gains across Spotify’s owned and licensed portfolio.
Automated sales channels represented nearly 40% of ad-supported revenues, up from slightly more than 30% in the first quarter. Active advertisers increased 60% year over year. Management completed its price-optimization work and migrated ad inventory to an in-house ad server, supporting its expectation for double-digit advertising growth in the second half of 2026.
SPOT's Cash Flow Supports BuybacksFree cash flow increased 14% year over year to €797 million, marking a record second-quarter performance. The improvement reflected higher net income adjusted for noncash items, partly offset by working-capital movements. Trailing 12-month free cash flow reached €3.3 billion.
Spotify ended the quarter with €9.4 billion in cash, restricted cash and short-term investments. The company repurchased $662 million of shares through Aug. 3, 30% more than during the comparable 2025 period. It has bought back nearly 2.2 million shares since resuming repurchases in 2025.
Spotify Guides for Continued Q3 GrowthFor the third quarter of 2026, Spotify expects MAUs of 788 million, implying 11 million sequential additions. The outlook incorporates product optimization in emerging markets that is intended to improve free-to-paid conversion. Premium subscribers are projected to reach 305 million, representing five million net additions.
Revenues are forecast at approximately €5 billion, indicating 17% year-over-year growth. Spotify expects a gross margin of 32.9% and operating income of €670 million. Management continues to anticipate about €200 million of incremental marketing and AI-related operating expenses in 2026, while expecting full-year gross and operating margins to improve.
How Have Estimates Been Moving Since Then?It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -12.06% due to these changes.
VGM ScoresCurrently, Spotify has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock has a score of D on the value side, putting it in the bottom 40% for value investors.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Spotify has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry PlayerSpotify belongs to the Zacks Internet - Software industry. Another stock from the same industry, Palantir Technologies Inc. (PLTR - Free Report) , has gained 7% over the past month. More than a month has passed since the company reported results for the quarter ended June 2026.
Palantir Technologies reported revenues of $1.94 billion in the last reported quarter, representing a year-over-year change of +92.8%. EPS of $0.41 for the same period compares with $0.16 a year ago.
Palantir Technologies is expected to post earnings of $0.41 per share for the current quarter, representing a year-over-year change of +95.2%. Over the last 30 days, the Zacks Consensus Estimate has changed +8.7%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #1 (Strong Buy) for Palantir Technologies. Also, the stock has a VGM Score of D.
Spotify ve 2. čtvrtletí zvýšil provozní zisk meziročně o 61 % na 655 milionů EUR a volný cash flow o 14 % na 797 milionů EUR. Akcie SPOT se ale obchodují za 32,08násobek forwardového zisku, nad odvětvovým průměrem 27,33násobku.
Key Takeaways Spotify's 2026 EPS estimate implies 20.3% growth, while Q2 operating income rose 61% y/y.SPOT trades at 32.08X forward earnings versus 27.33X for its industry, raising execution pressure.Spotify's free cash flow grew 14% year over year in Q2 2026 as new products broaden monetization. Spotify Technology S.A. (SPOT - Free Report) is producing faster earnings growth, stronger cash generation and wider monetization opportunities, but the stock's valuation already reflects demanding expectations.
For investors considering whether to buy now, the debate centers on whether margin expansion and revenue growth can keep advancing fast enough to support that premium without leaving the shares exposed to execution setbacks.
Spotify's Earnings Growth Supports the Bull CaseThe Zacks Consensus Estimate for 2026 earnings is $14.30 per share, implying 20.3% growth from 2025. That outlook follows a second quarter in which operating income rose 61% year over year to €655 million and gross margin reached a record 33.4%.
Management's 2030 framework calls for a mid-teens revenue compound annual growth rate, gross margin of 35% to 40% and operating margin above 20%. Reaching those targets would extend the shift from a user-growth story toward a model with greater earnings leverage.
SPOT's Valuation Demands Strong ExecutionSPOT trades at 32.08X forward earnings compared with 27.33X for its industry. That gap leaves less room for subscriber, pricing or margin results to fall short of expectations.
Image Source: Zacks Investment Research
The latest quarter also produced a 7.3% negative earnings surprise, while the 2026 earnings estimate declined 1.5% over the past four weeks. A premium multiple paired with softer estimate revisions makes consistent execution more important to the near-term investment case.
Spotify's Cash Flow Adds Financial FlexibilityFree cash flow reached €797 million in the second quarter, up 14% year over year, and totaled €3.3 billion over the trailing 12 months. The company ended the quarter with €9.4 billion in cash, restricted cash and short-term investments.
Spotify had no debt other than lease liabilities. It also repurchased $662 million of shares year to date through Aug. 3, giving management room to balance growth investment, potential acquisitions and capital returns.
SPOT Faces Content and AI Spending RisksSpotify still depends on licenses from major and minor rights holders, keeping royalty and content economics central to margin performance. Management expects marketing and artificial intelligence initiatives to add about €200 million of operating expenses in 2026.
Competition adds another execution test. Apple Inc. (AAPL - Free Report) offers Apple Music as an ad-free subscription across Apple devices and other platforms. Amazon.com, Inc. (AMZN - Free Report) markets Amazon Music Unlimited with 100 million songs and offline listening, giving consumers another broad subscription alternative.
Spotify's Monetization Runway Still Has DepthSpotify is expanding beyond traditional music subscriptions through audiobooks, artificial intelligence-driven discovery, creator tools, live-event features and advertising. Audiobooks+ has passed $100 million in annual recurring revenue, while audiobook penetration among Premium listeners more than doubled during the year.
Other products are broadening engagement. Prompted Playlists reached 14 million users among the first 100 million offered the feature, while nearly 50 million people use Jam each month. These initiatives could deepen monetization if engagement gains translate into retention, add-ons or advertising demand.
SPOT's Style Scores Favor Growth Over ValueFor investors weighing whether Spotify is worth buying now, the company's earnings growth, cash flow and monetization runway are meaningful positives, but the valuation premium and reinvestment requirements argue for a measured view rather than an aggressive entry thesis.
SPOT currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Spotify’s Growth Score of A reflects favorable growth characteristics, while the Value Score of D and Momentum Score of F are less supportive. The VGM Score of C points to a mixed overall profile, consistent with waiting for a more favorable balance between growth, valuation and near-term momentum.
Spotify začne označovat profily interpretů vytvořené pomocí AI štítkem „AI Persona“ a jejich hudbu vyřadí z redakčních i algoritmických doporučení. Štítky se objeví od příštího měsíce.
Spotify will begin labeling AI-generated artists with “AI Persona” profile tags and ban their music from its editorial and algorithmic recommendations, the company announced on Tuesday.
In mid-September, Spotify users will see “AI Persona” badges appear on some artists’ profiles that signal the artist’s identity is AI-generated, instead of representing a real person. While Spotify will allow artists to identify themselves as AI Personas, the company says it won’t rely on self-disclosure alone.
Image Credits:Spotify It will also review artist profiles and identify those where the artist’s name and imagery appear to represent photorealistic AI-generated identities. Spotify said it will begin its review with profiles that have met pre-defined audience thresholds to ensure the more listened-to artists are covered first.
Once labeled, the AI Persona badges will appear on the artist’s profile in the banner and the About section, in Search, and on track rows across playlists.
By default, Spotify won’t include AI Personas in its editorial or algorithmic recommendations, nor will it add AI Personas’ music to users’ personalized recommendations — unless they happen to follow an AI Persona. Only users can choose to follow an artist, so it’s an explicit signal that the user wants to hear more music from that person or group.
Image Credits:Spotify The move is the latest expansion of Spotify’s AI policies, which detail guidelines for how AI-generated music appears on its service. First announced in September 2025, Spotify’s current policy identifies and labels AI music using industry-standard techniques, and bans unauthorized AI voice clones and deepfakes from its platform.
Like others in the music industry, Spotify is attempting to balance innovations driven by AI, like its own AI-powered Prompted Playlists, AI DJ and chat, and forthcoming AI remixes, while still managing to thwart the deluge of AI-generated slop — low-quality content that AI has made it easier to mass produce. Allowing slop to proliferate could lead to a poor user experience and subscription cancellations.
Spotify also notes that artists will be able to appeal their AI Persona label if they think it’s been incorrectly applied.
Image Credits:Spotify Signaling its understanding of a growing consumer backlash against AI-generated art, Spotify wrote in its announcement that, “while we believe all artists have creative choice in determining how they present themselves, Spotify’s programming is focused on elevating music from authentic artists building careers in music.”
However, the company clarified that an AI Persona is a judgment on the artist’s profile, not the music.
“Although there’s a broad spectrum in how artists use AI as a creative tool, the question of whether a profile represents an actual human is one where Spotify can help make a clear determination. This badge is about the artist’s public identity, not about how the music was made,” the company said.
Information about how the music itself was made will continue to be available through Spotify’s other features, like AI Credits and SongDNA.
In the months ahead, Spotify will also roll out a tool that allows users to report artist profiles that appear to be AI Personas that haven’t yet been labeled.
The addition of the labels will also help Spotify users to differentiate between AI Personas and the forthcoming AI-generated remixes and covers, soon to be permitted by Spotify’s recent licensing deals with labels UMG and Merlin. The latter will allow for fan-made remixes and covers, while still funneling money back to the participating artists.
As for the AI Personas, Spotify says artists will be able to self-disclose starting on August 11, 2026, through Spotify for Artists. The labels themselves will appear starting next month.
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Sarah has worked as a reporter for TechCrunch since August 2011. She joined the company after having previously spent over three years at ReadWriteWeb. Prior to her work as a reporter, Sarah worked in I.T. across a number of industries, including banking, retail and software.
You can contact or verify outreach from Sarah by emailing [email protected] or via encrypted message at sarahperez.01 on Signal.
It has been a volatile year for the stock market, with investors having to navigate the ongoing geopolitical tensions in the Middle East, new leadership at the Federal Reserve, and a series of new tariffs imposed by the Trump administration. But Spotify (SPOT +4.33%) stock is down 37% from its all-time high for a different reason.
The company operates the world's largest music streaming platform, and management is currently investing less aggressively in growth in order to prioritize profitability. The strategy is working very well, but it has forced investors to reconsider Spotify's previously elevated valuation.
According to Wall Street, the recent dip might be a great buying opportunity. The majority of analysts tracked by The Wall Street Journal have rated Spotify stock a buy, with none recommending selling. Plus, their average price target points to substantial potential upside over the coming 12 months. Here's why their bullishness might be justified.
Image source: Getty Images.
Transforming the user experience through technology Most music streaming services offer similar content catalogs, because a small handful of record labels control most of the industry's rights, and they want their artists to reach the widest possible audience. Therefore, Spotify can only differentiate its service from the competition by offering a better user experience, and it's leaning heavily on technologies like artificial intelligence (AI) to do so.
Spotify has a growing portfolio of AI-powered features that are driving engagement. There is Prompted Playlist, which will curate custom music playlists based on a description provided by the user. Then there is AI DJ, which autonomously plays songs based on a user's listening history, complete with a software-powered voiceover.
Over the last few weeks, Spotify started rolling out a niche feature called Running Mode, which is tailored to the fitness community. A user can tell Spotify to craft a playlist based on the length of their workout, and it will group a series of appropriate songs together based on their beats per minute, and the user's individual tastes.
The more time a paying subscriber spends on Spotify, the more likely they are to stick around for the long term. The more time a free user spends on the app, the more likely they are to convert into a paying subscriber. That is why the company is focusing so heavily on developing features to lift engagement.
Sacrificing revenue growth for higher profits During the second quarter, Spotify had a record 300 million premium subscribers, and another 494 million free monthly active users who were monetized by advertising. The company generated a combined $5.5 billion in revenue from both user categories, which was up 14% year over year.
Spotify could have grown its revenue even faster if it spent more aggressively in areas like marketing, but management is prioritizing profitability instead. As a result, the company increased its total operating expenses by just 3% year over year to $1.08 billion during the quarter.
With the money coming in (revenue) growing much faster than the money going out (operating expenses), Spotify managed to generate $628 million in net income during Q2, which was a massive improvement over the $99 million net loss it produced in the same quarter last year.
This is really important because Spotify will have a more sustainable business over the long term if its profits continue to increase. Over time, this will give management more flexibility to redirect money into growth initiatives like marketing and research and development, without having to rely on debt or external funding from investors.
Wall Street is very bullish on Spotify stock, and I concur The Wall Street Journal tracks 42 analysts who cover Spotify stock, and 26 of them have given it a buy rating. Seven others are in the overweight (bullish) camp, while the remaining nine recommend holding. None recommend selling.
The analysts have an average price target of $600, implying a potential upside of 26% for Spotify stock over the next 12 months or so. The Street-high target of $720 suggests the stock could soar by 51% instead.
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Based on Spotify's trailing 12-month earnings of $15.86 per share, its stock is trading at a price-to-earnings (P/E) ratio of 30. That is a slight discount to the Nasdaq-100 index, which has a P/E of 32.6, so Spotify might be considered undervalued.
Moreover, Wall Street's average estimate (provided by Yahoo! Finance) suggests the company could grow its earnings to $18.20 per share in 2027, placing its stock at a forward P/E of 26. In other words, the stock would have to climb by 25% over the next 18 months or so to match the P/E of the Nasdaq-100, so Wall Street's average price target of $600 certainly looks achievable.
Reaching $720 might take more time, but it will be possible in the future, particularly if Spotify's bottom line keeps improving at the current pace.
MarketBeat Week in Review – 06/08 - 06/12Spotify Technology NYSE: SPOT reported second-quarter results marked by accelerating revenue growth, record gross margin and subscriber growth that pushed its Premium base above 300 million for the first time.
Co-CEO Alex Norström said the company’s revenue rose 15% year over year on a constant-currency basis, accelerating from 14% growth in the first quarter. Gross margin reached a record 33.4%, while free cash flow continued to strengthen. Spotify added 7 million net subscribers during the quarter and ended the period with 300 million subscribers, exceeding its guidance by 1 million.
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Spotify's "North Star" Outlook Was Music to Investors Ears“More people are choosing Spotify, they’re engaging more deeply, and they’re converting,” Norström said, adding that active days among global subscribers increased during the quarter.
Financial Results and Third-Quarter Outlook CFO Christian Luiga said monthly active users, or MAUs, grew 12% year over year, including notable outperformance in Europe and North America. Spotify added 16 million net MAUs, which was 1 million below its forecast, and ended the quarter with 777 million users.
Total revenue was EUR 4.8 billion, up 15% year over year on a constant-currency basis. Premium revenue increased about 16%, driven by 9% subscriber growth and 7.4% year-over-year growth in average revenue per user. Ad-supported revenue rose 3%, consistent with the first quarter. Operating income totaled EUR 655 million, above guidance of EUR 630 million, for an operating margin of 13.7%. Free cash flow was EUR 797 million, up 14% year over year. Peloton Stock Gives Back Gains After Upbeat Earnings ReportGross-margin performance exceeded Spotify’s guidance by 30 basis points. Luiga said the result reflected quarterly timing shifts related to growth investments and a small one-time benefit from the cancellation of Canada’s digital services tax, which allowed Spotify to reverse an accrual from prior years.
For the third quarter, Spotify forecast 788 million MAUs, representing net additions of 11 million, and 305 million subscribers, or 5 million net additions. The company expects third-quarter revenue of approximately EUR 5 billion, representing 14% growth, gross margin of 32.9% and operating income of EUR 670 million.
Luiga said Spotify continues to expect advertising revenue growth to “inflect towards double-digit growth” in the second half of 2026. The company also expects both gross margin and operating margin to improve on a full-year basis, along with meaningful growth in free cash flow.
Free-Service Changes and Advertising Buildout Spotify is making product and monetization changes in selected emerging markets, including adjustments to sign-up flows, reduced support for certain lower-end Android devices, changes to advertising load and limitations in the free tier. Norström said the moves are intended to create a higher-quality MAU base and improve monetization over time.
The changes are expected to affect third-quarter MAU growth, but Norström said they should not come at the expense of subscriber growth in the near term. He described the strategy as shifting toward a “monetization lever” after periods of strong user growth in emerging markets.
On advertising, the company said its automated sales channels represented nearly 40% of ad-supported revenue during the second quarter, up from just over 30% in the first quarter. Active advertisers rose 60% year over year to 33,000, according to Norström.
Spotify has completed its migration to an in-house advertising server, with Norström saying that 99% of impressions are now served through its proprietary ad stack. Luiga said the company’s direct-sales channel had experienced expected declines, but that price-optimization work in the channel was completed and it is now stabilizing.
Premium Features, AI and Live Events The company highlighted several new products intended to increase engagement and expand the value of its Premium offering. Its Reserved ticketing feature, launched in the U.S. with Live Nation in June, has supported multiple tours and reserved nearly 100,000 tickets through Spotify. Norström said some allocations sold out and were increased by Live Nation during the run.
Spotify said Reserved is currently focused on adding value for Premium subscribers rather than direct monetization. The product gives eligible users earlier access to tickets while helping artists reach dedicated fans, Norström said.
AI-powered features were also a central focus of the call. Spotify’s DJ feature is used by roughly one-quarter of active users, while Prompted Playlist has attracted about 14 million users out of the first 100 million users to whom it has been rolled out. Söderström said early retention trends for Prompted Playlist are promising.
The company’s large taste model, which uses data from 3.4 trillion daily platform events, has been deployed in its autoplay recommendation system. Söderström said that in the first two months following deployment, active days increased, autoplay minutes and track saves rose significantly, and autoplay drop-off declined.
Spotify also said SongDNA has been used by more than 100 million subscribers, making it among the company’s fastest-adopted features. Other recently introduced or planned products include Talk to Spotify, Personal Podcasts, Studio by Spotify, Running Mode and audiobook Prompted Playlists.
Music Add-Ons and Cost Discipline Norström said Audiobooks+ has surpassed $100 million in annual recurring revenue, while overall audiobook penetration among Premium listeners has more than doubled this year. He described add-ons as a way to drive structural ARPU growth beyond standard Premium price increases.
Spotify is also developing music remix and covers capabilities that would require artist consent, provide attribution and compensate artists, labels, publishers and songwriters. Following an agreement with Universal Music Group announced in May, Spotify said it reached a deal with Merlin, which represents more than 30,000 independent labels and distributors.
Söderström said Spotify does not need agreements with every major label before it begins a research preview of the remix product, though it wants as many participating artists as possible. He said the company plans to use listener preference data from early users to improve the model before a broader launch.
Spotify expects marketing and AI-related investments to add roughly EUR 200 million in operating expenses for 2026. Luiga said the expense increase is not structural, noting that headcount is expected to remain flat for the year. Söderström said the company’s AI costs are largely tied to compute and can be managed through its internal tools, model selection and usage controls.
About Spotify Technology (NYSE:SPOT)Spotify Technology is a digital audio streaming company best known for its on-demand music service and a growing portfolio of spoken-word content. Founded in Sweden in 2006 by Daniel Ek and Martin Lorentzon and launched commercially in 2008, the company offers a cross-platform app that enables users to discover, stream and organize music, podcasts and other audio. Its primary consumer products include a free, ad-supported tier and a paid Spotify Premium subscription that provides ad-free listening, offline playback and higher-quality audio streams.
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Spotify ve 2. čtvrtletí vykázal EPS 3,03 USD při očekávání 3,29 USD a tržby 5,554 mld. USD, také pod odhadem. Pro 3. čtvrtletí čeká tržby 5,0 mld. USD, nad konsensem.
The company posted second-quarter earnings of $3.03 per share, missing the analyst consensus estimate of $3.29. Revenue increased 14% year over year to $5.554 billion (4.78 billion euros), below the Street estimate of $5.600 billion.
For the third quarter, Spotify expects revenue of 5.0 billion euros, or about $5.813 billion, above the analyst consensus estimate of $5.770 billion.
The company expects Premium subscribers to reach 305 million, implying net additions of about 5 million. Monthly active users are projected to increase to 788 million, below analysts’ estimate of 793 million.
Spotify shares rose 1.7% to $486.05 in pre-market trading.
These analysts made changes to their price targets on Spotify following earnings announcement.
Rosenblatt analyst Barton Crockett maintained the stock with a Neutral and lowered the price target from $531 to $527. Cantor Fitzgerald analyst Deepak Mathivanan maintained the stock with a Neutral and raised the price target from $510 to $530. Considering buying SPOT stock? Here’s what analysts think:
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Spotify přidává Merlin do své AI iniciativy pro remixy a covery, čímž se k ní dostane více než 30 000 labelů z jeho sítě. Nástroj má fungovat jen se souhlasem umělců a jako placený doplněk.
During its second-quarter earnings call on Tuesday, Spotify again teased the upcoming release of a new product that will allow music fans to leverage AI to make covers and remixes of artists’ music, with the artists’ consent.
The company also announced that Merlin, a licensing partner for independent labels and distributors, has now joined Universal Music Group (UMG) on the new AI music effort. The deal brings more than 30,000 labels from Merlin’s network to the product, which will allow fan-made covers and remixes by artists who agree to participate.
Spotify has positioned its AI music product as being significantly different from the more controversial AI music startups that have been used to create fully artificial songs. Instead, Spotify co-CEO Gustav Söderström told investors on Tuesday’s call that the company’s AI music product will be about “real artists, not fake artists.”
“We want artists to be consenting [to add] their work into this catalog, so people can play around with covers and remixes based on their art,” added co-CEO Alex Norström. “We also obviously want to give them credit. And last but not least…we not only have the consent and give credit, but we also drive the compensation for this. So, really, we’re talking about the first legal way to partake in this AI tailwind that we see coming for interactive music,” he said.
AI music has flooded streaming services. Music streamer Deezer recently noted that more than 50% of daily track uploads were generated with AI, up from 10% in January 2025.
The company told investors that a research preview of the fan remix and covers product would initially be made available to a subset of users. Spotify also noted that it would not require a full music catalog to get started. The company did not say when the preview would arrive.
The new tool will launch as a paid add-on, creating an additional revenue stream for artists, Spotify previously said.
“Our remix and covers I think is an incredibly exciting product again because there is no one else that can really do this,” Söderström said. “Normal generative music will happen with or without us. This product will not happen without us, and it needs to exist so that existing artists can participate in this.”
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Sarah has worked as a reporter for TechCrunch since August 2011. She joined the company after having previously spent over three years at ReadWriteWeb. Prior to her work as a reporter, Sarah worked in I.T. across a number of industries, including banking, retail and software.
You can contact or verify outreach from Sarah by emailing [email protected] or via encrypted message at sarahperez.01 on Signal.
Spotify ve 2. čtvrtletí překonalo 300 milionů předplatitelů Premium, ale zklamalo slabším ziskem a opatrným výhledem na 3. čtvrtletí. Akcie v premarketu oslabují o 4 %.
Spotify ve druhém kvartále dál rostlo napříč většinou klíčových metrik a poprvé překonalo hranici 300 milionů uživatelů programu Premium. Investory však zklamal pomalejší růst uživatelů, slabší ziskovost a opatrný výhled na třetí kvartál. Akcie v pre-marketu oslabují o 4 %
Hudební gigant za druhý kvartál vykázal meziroční nárůst tržeb o 14 % na 4,8 miliardy eur. Mezikvartálně tržby vzrostly o pět procent. Na celkových tržbách se z naprosté většiny podílely příjmy z prémiového předplatného, které oproti loňskému druhému kvartálu vzrostly o 15 %. Segment podporovaný reklamou vykázal meziročně růst pouze o jedno procento, mezikvartálně však přidal 16 %. Celkově byly tržby Spotify jen těsně pod očekáváním analytiků.
Spotify zvýšilo hrubou marži o dva procentní body na 33,4 %, k čemuž přispěl rychlejší růst tržeb než nákladů. Provozní zisk dosáhl 655 milionů eur, což je sice meziročně o 61 % více, mezikvartálně se však jedná o pokles o 8 %.
Slabší byl také zisk na akcii. Ten ve druhém kvartále dosáhl 2,61 eura, což je o osm centů méně, než očekával trh. Free cash flow meziročně vzrostlo o 14 % na téměř 800 milionů eur. Podobně jako v případě provozního zisku však bylo číslo za první kvartál o nižší jednotky procent vyšší.
Naprosto klíčová jsou v případě byznysových modelů založených na předplatném čísla aktivních uživatelů a jejich růst. Počet platících měsíčně aktivních uživatelů programu Premium vzrostl meziročně o 9 % na rekordních 300 milionů. Bezplatný plán podporovaný reklamou ve druhém kvartále využívalo 494 milionů lidí, což je o 14 % více než před rokem. Celkový počet měsíčně aktivních uživatelů dosáhl 777 milionů a meziročně vzrostl o 12 %. Mezikvartálně pak všechny segmenty rostly o dvě procenta. Průměrná tržba na uživatele činila 4,89 eur.
Audiočlánky, podcastový AI agent a rezervace vstupenek pro věrné posluchače
V USA firma spustila program Reserved, který umožňuje nejvěrnějším posluchačům přednostní přístup k rezervacím vstupenek na koncerty jejich oblíbených interpretů. Jedná se o společný projekt se společností Live Nation, jehož prostřednictvím se zatím prodalo téměř 100 tisíc vstupenek.
Ke dvacátému výročí Spotify spustilo speciální funkci umožňující uživatelům sledovat vývoj jejich hudebního vkusu. Během prvních šesti dní ji využilo zhruba 100 milionů lidí. Podle firmy zároveň pomohla dosáhnout historicky nejvyššího počtu nových předplatitelů získaných během jediného dne.
Spotify dále spustilo na trzích, kde jsou dostupné audioknihy, funkci namluvených článků od magazínů jako Rolling Stone, The Atlantic nebo Vogue a představilo novou desktopovou aplikaci Studio by Spotify Labs.
Nová aplikace dokáže pomocí AI generovat personalizované podcasty na základě dat, ke kterým uživatel poskytne přístup, například kalendáře nebo důležitých e-mailů. Může tak vytvářet například ranní briefing na míru. Jde o další krok ve využívání umělé inteligence podobně jako v případě Personal Podcast, jenž umožňuje generovat podcasty na základě svěřených zdrojů nebo zadaných témat.
Výhled na třetí kvartál
Interní odhady na příští kvartál jsou z pohledu trhu smíšené až mírně negativní. Počet platících uživatelů firma cíluje na 305 milionů, což odpovídá konsenzu. Mírně pod odhady je naopak očekávaný provozní zisk ve výši 670 milionů eur i celkový počet měsíčně aktivních uživatelů. Spotify očekává 788 milionů MAUs, zatímco trh by rád viděl hodnoty nad 793 miliony.
Pozitivním překvapením byl naopak výhled tržeb. Ty by měly dosáhnout pěti miliard eur, což je o 70 milionů více, než očekával trh. Hrubá marže by měla činit 33 %.
Výsledky Spotify tak po silném prvním kvartálu působí spíše rozpačitě. Důvodem je zejména pomalejší růst MAUs, nižší ziskovost a smíšený výhled na třetí kvartál. Na druhou stranu Spotify zůstává dominantním hráčem ve svém oboru se zdravou rozvahou a více než devíti miliardami eur v hotovosti. Z pohledu investora tak bude i nadále klíčové sledovat, jak se firmě daří získávat nové uživatele a převádět neplatící posluchače na předplatitele tarifu Premium.
Spotify (SPOT - Free Report) came out with quarterly earnings of $3.03 per share, missing the Zacks Consensus Estimate of $3.27 per share. This compares to a loss of $0.48 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of -7.34%. A quarter ago, it was expected that this music-streaming service operator would post earnings of $3.72 per share when it actually produced earnings of $4.04, delivering a surprise of +8.6%.
Over the last four quarters, the company has surpassed consensus EPS estimates three times.
Spotify, which belongs to the Zacks Internet - Software industry, posted revenues of $5.55 billion for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 0.01%. This compares to year-ago revenues of $4.76 billion. The company has topped consensus revenue estimates three times over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.
Spotify shares have lost about 16.3% since the beginning of the year versus the S&P 500's gain of 11%.
What's Next for Spotify?While Spotify has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.
Ahead of this earnings release, the estimate revisions trend for Spotify was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $3.70 on $5.7 billion in revenues for the coming quarter and $14.45 on $22.51 billion in revenues for the current fiscal year.
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Internet - Software is currently in the bottom 40% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
Arteris, Inc. (AIP - Free Report) , another stock in the same industry, has yet to report results for the quarter ended June 2026. The results are expected to be released on August 6.
This company is expected to post quarterly loss of $0.05 per share in its upcoming report, which represents a year-over-year change of +54.6%. The consensus EPS estimate for the quarter has been revised 7.7% lower over the last 30 days to the current level.
Arteris, Inc.'s revenues are expected to be $23.45 million, up 42.1% from the year-ago quarter.
NEW YORK--(BUSINESS WIRE)--Spotify Technology S.A. (NYSE: SPOT) has released its results for the second quarter of 2026 today. Please visit investors.spotify.com to view the Shareholder Deck and other supplemental materials.
As previously announced, the company will host a live question and answer session to discuss second quarter 2026 results at 8:00 a.m. Eastern Time. Alex Norström and Gustav Söderström, our Co-Chief Executive Officers, and Christian Luiga, our Chief Financial Officer, will be on hand to answer questions. Questions can be submitted by going to slido.com and using the code #SpotifyEarningsQ226.
What: Spotify Second Quarter 2026 Financial Results Q&A Webcast
When: Tuesday, August 4, 2026
Time: 8:00 a.m. Eastern Time
Q2 2026 Update: https://investors.spotify.com/
Webcast: https://app.webinar.net/24zaxYZl1G3
Slido Event Code: #SpotifyEarningsQ226
A live webcast of the earnings call will be accessible at investors.spotify.com and a recording of the webcast will be available following the session.
About Spotify Technology S.A.
Spotify’s platform revolutionized music listening forever when we launched in 2008. Today, more listeners than ever can discover, manage and enjoy over 100 million tracks, 7 million podcast titles, and 500,000 audiobooks in select markets on Spotify. We are the world’s most popular audio streaming subscription service with 777 million users, including 300 million subscribers across 184 markets.
Spotify čeká ve třetím čtvrtletí provozní zisk 670 milionů EUR, pod odhadem trhu, protože růst uživatelů zpomaluje v Evropě a Severní Americe. Akcie v premarketu klesly asi o 5 %.
Spotify's logo at the headquarters on Regeringsgatan in Stockholm, Sweden November 18, 2025. TT News Agency/Fredrik Sandberg/via REUTERS Purchase Licensing Rights, opens new tab
Aug 4 (Reuters) - Spotify (SPOT.N), opens new tab forecast third-quarter profit below Wall Street estimates on Tuesday, after the streaming giant reported slowing user growth in major markets of Europe and North America, driving shares around 5% lower in premarket trading.
The Swedish company has launched AI features like "Personal Podcasts" and new offerings such as "Reserved" to attract more user and fend off competition from rivals including YouTube and Netflix, and AI music startups like Udio and Suno.
The Reuters Daily Briefing newsletter provides all the news you need to start your day. Sign up here.
Spotify said it expects operating income of €670 million ($770.97 million) in the third quarter, below analysts' average estimates of €677.8 million, according to data compiled by Visible Alpha.
In the second quarter, its operating income came in at €655 million, beating estimates of €639.2 million, driven by strong revenue growth and lower payroll taxes.
Such taxes, called social charges, are tied to the value of the company's share price. The company's shares have fallen about 16% so far this year.
Its quarterly revenue rose 14% to €4.78 billion, slightly below LSEG-compiled estimates of €4.80 billion. The revenue forecast for third quarter of €5 billion was slightly above estimates of €4.93 billion.
Its monthly active users forecast of 788 million was below Visible Alpha estimates of 793.6 million, while its outlook for a 5 million increase in premium subscribers to 305 million was largely inline with estimates.
($1 = 0.8690 euros)
Reporting by Jaspreet Singh in Bengaluru; Editing by Leroy Leo
Our Standards: The Thomson Reuters Trust Principles., opens new tab
Spotify v poslední seanci vzrostl o 2,97 % na 492,32 USD a překonal širší trh. Před výsledky 4. srpna analytici čekají EPS 3,28 USD a výnosy 5,58 mld. USD.
Spotify (SPOT - Free Report) closed at $492.32 in the latest trading session, marking a +2.97% move from the prior day. This move outpaced the S&P 500's daily loss of 0.19%. Elsewhere, the Dow lost 0.59%, while the tech-heavy Nasdaq lost 0.05%.
Shares of the music-streaming service operator witnessed a gain of 2.15% over the previous month, beating the performance of the Computer and Technology sector with its loss of 4.32%, and the S&P 500's gain of 0.55%.
Investors will be eagerly watching for the performance of Spotify in its upcoming earnings disclosure. The company's earnings report is set to be unveiled on August 4, 2026. In that report, analysts expect Spotify to post earnings of $3.28 per share. This would mark year-over-year growth of 783.33%. Alongside, our most recent consensus estimate is anticipating revenue of $5.58 billion, indicating a 17.27% upward movement from the same quarter last year.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $14.51 per share and revenue of $22.62 billion. These totals would mark changes of +22.04% and +16.41%, respectively, from last year.
Investors should also pay attention to any latest changes in analyst estimates for Spotify. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 1.15% lower. Spotify is holding a Zacks Rank of #4 (Sell) right now.
Looking at its valuation, Spotify is holding a Forward P/E ratio of 32.95. This denotes a premium relative to the industry average Forward P/E of 20.12.
We can additionally observe that SPOT currently boasts a PEG ratio of 1.18. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. By the end of yesterday's trading, the Internet - Software industry had an average PEG ratio of 1.09.
The Internet - Software industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 91, finds itself in the top 37% echelons of all 250+ industries.
The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
To follow SPOT in the coming trading sessions, be sure to utilize Zacks.com.
Spotify má podle Jefferies dodat stabilní výsledky za 2. čtvrtletí, ale trh čeká hlavně na komentáře k AI remixingu a jeho spuštění. Banka zopakovala doporučení Buy a cílovou cenu 600 USD.
Spotify Technology SA (NYSE:SPOT) is expected to report a steady second-quarter performance, with Jefferies maintaining a positive long-term view despite not anticipating a "narrative changing" earnings release.
The investment bank reiterated its ‘Bu’y rating and $600 price target, implying upside from current levels of $485, ahead of the company's results, writing that it prefers to remain positioned for potential catalysts including a Warner Music Group remixing agreement and the launch of AI-powered remixing features.
For the second quarter, Jefferies forecasts gross margin of 33.1%, in line with Spotify's guidance, while noting that a typical beat of more than 20 basis points to around 33.3% represents a reasonable upside scenario.
The analysts also view the current third-quarter Wall Street gross margin estimate of 33% as achievable, despite expected regulatory charges.
Jefferies expects constant-currency revenue growth of 15% year over year in both the second and third quarters, in line with consensus estimates.
It also forecasts second-quarter net additions of 6 million premium subscribers and 17 million monthly active users, with potential upside to MAUs from Spotify's Wrapped 20th anniversary campaign.
The analysts expect investor attention to center on management's comments about new products, particularly the timeline and adoption of an AI remixing offering.
"We'll be listening for commentary on AI remixing adoption/timeline, but given investor skepticism on uptake, remixing is ultimately a 'show-me' that we think plays out positively in the coming months," Jefferies wrote.
While the bank sees the potential for lower operating expenses, it wrote that cost reductions alone are unlikely to drive a sustained re-rating without additional revenue from new products.
Looking further ahead, Jefferies expects 2027 to benefit from new product opportunities, additional pricing initiatives and more normalized cost growth, while reiterating that evidence of incremental revenue from AI remixing could renew investor interest in the stock.
Spotify spouští pro předplatitele Premium AI asistenta podobného ChatGPT, který jim na mobilu pomůže vybrat hudbu i další audio. Funkce je zatím v beta verzi v USA, Irsku a Švédsku na zařízeních s iOS a Androidem, pro uživatele od 18 let a v angličtině.
Spotify is taking another step to infuse AI technology into its listening experience, with Tuesday’s news that Premium users will now be able to have interactive conversations with the app to choose what music or other audio they want to hear.
The feature is initially available in the U.S., Ireland, and Sweden across iOS and Android devices for users 18 years old and above in English. It’s considered a beta release, meaning that things may not always work perfectly, Spotify says, but user feedback will help to improve the product.
The company didn’t explicitly share more details about the AI technology under the hood in its announcement, but Spotify confirmed to TechCrunch that it uses a mix of its own AI technology and models from multiple providers, based on whatever is best for the task.
The addition is the latest example of how Spotify has put AI technology to use to help people interact with the app’s extensive catalog of music, podcasts, and audiobooks. The company also offers tools like an AI DJ, which speaks in an AI voice that you can engage with directly, plus AI features for building playlists with prompts and those for connecting Spotify with third-party AI chatbots, like ChatGPT.
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The new feature extends the ability to chat with Spotify beyond the AI DJ experience, allowing users to talk to Spotify across the app’s Home and Now Playing views on mobile devices. Users can either type or speak to the app and have back-and-forth conversations to help them choose what to play next. Beyond that, Spotify says the app will also be able to chat with users about their listening history and can help them learn more about their favorite music or go deeper into podcasts or audiobooks.
That means you could get into questions like what inspired a certain song, or dates of album releases, or even get suggestions of other artists you might like, based on what you’re playing. You can also ask about your own listening history, like when was the first time you played a certain track, or you could explore more into what sort of genres you’ve been streaming lately.
In the announcement about the new feature, Spotify also offers a few suggestions as to how to use this interactive technology. For instance, you could ask Spotify to “play some artists I haven’t heard before,” then continue to shape that selection with follow-ups, like asking it to add a specific artist by name, or narrow the selection to just more recent tracks. You could also shape the request further by asking it to be “more upbeat,” or give it other directions.
Plus, you can ask Spotify to save songs, add songs to your queue, or follow the artist via the new feature.
The feature is rolling out now to the markets on mobile devices.
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UBS čeká, že Spotify ve 2. čtvrtletí zrychlí růst tržeb na 15,6 % FXN na 4,8 miliardy EUR. Hrubá marže má vzrůst na 33,1 % a provozní zisk na 634 milionů EUR.
Spotify Technology SA (NYSE:SPOT) is expected to post accelerating revenue growth in the second quarter, according to UBS, with results likely to come in largely in line with management's outlook on the back of price increases and stable gross margins.
The bank forecasts second-quarter revenue of €4.8 billion, up 15.6% on a foreign exchange neutral basis, compared with 14.2% growth in the first quarter.
UBS expects 6 million premium net additions, down from 8 million a year earlier, citing longer conversion times tied to new free tier features, a shift in campaign marketing timing and a tougher iOS comparison.
Premium average revenue per user is expected to grow 8.1% year over year on an FXN basis, while advertising revenue growth is expected to improve as the company laps lower podcast inventory from last year, with further acceleration anticipated in the second half as self-serve and programmatic channels expand.
UBS forecasts gross margins expanding 160 basis points year over year to 33.1%, and operating income of €634 million for the quarter.
Looking further out, UBS is largely maintaining its 2026 estimates, projecting €19.4 billion in annual revenue, up 14.3% FXN, and gross margins of 33.3%. The bank expects free cash flow of €3.4 billion in 2026, up 18% year over year, and anticipates Spotify will ramp up share buybacks following the cash repayment of its convertible notes in March.
UBS rates Spotify shares Buy and lowered its price target to $690 from $735, reflecting slightly lower EBITDA estimates on higher opex and a reduced forward multiple. The bank pointed to new AI tools and premium tier offerings as potential drivers of deeper user engagement and improved premium conversion over the medium to long term.
Spotify (SPOT - Free Report) ended the recent trading session at $493.95, demonstrating a +2.26% change from the preceding day's closing price. The stock outpaced the S&P 500's daily loss of 0.45%. Meanwhile, the Dow lost 0.25%, and the Nasdaq, a tech-heavy index, lost 1.16%.
Coming into today, shares of the music-streaming service operator had lost 4% in the past month. In that same time, the Computer and Technology sector gained 0.38%, while the S&P 500 gained 2.14%.
Investors will be eagerly watching for the performance of Spotify in its upcoming earnings disclosure. The company's earnings report is set to be unveiled on August 4, 2026. The company is forecasted to report an EPS of $3.29, showcasing a 785.42% upward movement from the corresponding quarter of the prior year. At the same time, our most recent consensus estimate is projecting a revenue of $5.6 billion, reflecting a 17.66% rise from the equivalent quarter last year.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $14.62 per share and revenue of $22.67 billion. These totals would mark changes of +22.96% and +16.66%, respectively, from last year.
Investors should also take note of any recent adjustments to analyst estimates for Spotify. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.
Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Within the past 30 days, our consensus EPS projection has moved 0.42% lower. Spotify is currently a Zacks Rank #4 (Sell).
In terms of valuation, Spotify is presently being traded at a Forward P/E ratio of 33.04. Its industry sports an average Forward P/E of 19.77, so one might conclude that Spotify is trading at a premium comparatively.
Investors should also note that SPOT has a PEG ratio of 1.19 right now. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The Internet - Software industry had an average PEG ratio of 1.09 as trading concluded yesterday.
The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 95, putting it in the top 39% of all 250+ industries.
The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.
Spotify zaznamenal pokles o 3,02 %, což je výraznější než pokles S&P 500. Očekává se, že Spotify vykáže zisk 3,3 USD na akcii, což by znamenalo meziroční růst o 787,5 %.
Spotify (SPOT - Free Report) ended the recent trading session at $455.60, demonstrating a -3.02% change from the preceding day's closing price. The stock fell short of the S&P 500, which registered a loss of 1.22% for the day. On the other hand, the Dow registered a loss of 0.98%, and the technology-centric Nasdaq decreased by 1.35%.
Shares of the music-streaming service operator witnessed a gain of 6.39% over the previous month, beating the performance of the Computer and Technology sector with its gain of 1.19%, and the S&P 500's gain of 1.56%.
Analysts and investors alike will be keeping a close eye on the performance of Spotify in its upcoming earnings disclosure. On that day, Spotify is projected to report earnings of $3.3 per share, which would represent year-over-year growth of 787.5%. Simultaneously, our latest consensus estimate expects the revenue to be $5.59 billion, showing a 17.4% escalation compared to the year-ago quarter.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $14.68 per share and revenue of $22.69 billion. These totals would mark changes of +23.47% and +16.78%, respectively, from last year.
Investors should also note any recent changes to analyst estimates for Spotify. Such recent modifications usually signify the changing landscape of near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, there's been a 1.32% fall in the Zacks Consensus EPS estimate. Right now, Spotify possesses a Zacks Rank of #3 (Hold).
In terms of valuation, Spotify is presently being traded at a Forward P/E ratio of 32.01. This denotes a premium relative to the industry average Forward P/E of 18.64.
It is also worth noting that SPOT currently has a PEG ratio of 1.15. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The average PEG ratio for the Internet - Software industry stood at 1.03 at the close of the market yesterday.
The Internet - Software industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 86, this industry ranks in the top 36% of all industries, numbering over 250.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.
