Spotify’s Growth Potential: Strategic Entry Point and Long-term Profitability Outlook

Bernstein analyst Boris Van reiterated a Buy rating on Spotify today and set a price target of $840.00.

Boris Van has given his Buy rating due to a combination of factors that highlight Spotify’s potential for growth and profitability. Despite a recent pullback in stock price, Van sees this as a strategic entry point, maintaining confidence in the company’s ability to achieve significant gross profit growth by 2026. This confidence is bolstered by Spotify’s unique position as a differentiated digital audio platform, which provides it with substantial pricing power that has yet to be fully utilized.
Van also points to the company’s strategic initiatives, such as video podcast investments and the Spotify Partner Program, which are expected to drive revenue growth. Additionally, the introduction of new product features, including enhanced AI capabilities and new audiobook languages, are anticipated to create opportunities for price increases. These factors, combined with a strong subscriber growth trajectory and high-margin content verticals, underpin Van’s positive outlook on Spotify’s long-term financial performance.

According to TipRanks, Van is a 4-star analyst with an average return of 15.8% and a 53.57% success rate. Van covers the Communication Services sector, focusing on stocks such as Tencent Music Entertainment Group Class A, Bilibili, and Tencent Music Entertainment Group.

In another report released yesterday, Guggenheim also maintained a Buy rating on the stock with a $800.00 price target.