Jeffrey Wlodarczak, an analyst from Pivotal Research, reiterated the Buy rating on Spotify. The associated price target remains the same with $900.00.
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Jeffrey Wlodarczak has given his Buy rating due to a combination of factors that highlight Spotify’s strong market position and growth potential. The company exceeded expectations for monthly active users (MAUs) in the second quarter, which is a critical metric for its continued success. Despite some financial metrics being slightly below expectations, such as revenue impacted by currency fluctuations and slower advertising growth, the overall engagement per user and MAU growth remain robust.
Wlodarczak believes Spotify has a significant competitive advantage in the global audio streaming market, driven by its superior user interface, product offerings, and recommendation engine. The company has demonstrated the ability to increase prices without significantly affecting churn rates, which is a positive indicator of customer loyalty and pricing power. Additionally, there are opportunities for Spotify to enhance its platform with new services and products, potentially increasing user engagement and revenue. These factors, combined with a long-term growth trajectory, underpin the Buy rating despite short-term challenges.
In another report released today, Canaccord Genuity also maintained a Buy rating on the stock with a $850.00 price target.