Goldman Sachs analyst Eric Sheridan reiterated a Buy rating on Spotify (SPOT – Research Report) on April 29 and set a price target of $680.00.
Eric Sheridan has given his Buy rating due to a combination of factors including Spotify’s robust user growth, particularly in premium subscribers, which is driving significant revenue increases. The company is also making strides in expanding its gross profit margins and converting operating profits from its gross profit pool, although management remains cautious about short-term rates and is prepared to seize investment opportunities in the medium to long term.
Additionally, Spotify’s ongoing innovation, especially in Video Podcasts and advertising, is expected to serve as a catalyst for future growth. Despite no updates on shareholder returns, the company’s evolution into a profit-generating entity and its substantial cash reserves are promising. In the long term, Spotify’s position as a leading global audio platform is anticipated to result in sustained user growth, increased engagement, and pricing power, alongside improvements in gross and operating margins due to favorable content costs and operational efficiencies.
In another report released yesterday, J.P. Morgan also maintained a Buy rating on the stock with a $670.00 price target.
SPOT’s price has also changed dramatically for the past six months – from $391.230 to $576.940, which is a 47.47% increase.