The stock of Spotify Technology (SPOT) is up 6% on August 4 after the audio-streaming company announced that it is again raising prices for its premium subscriptions.
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The Swedish company said in a news release that prices for premium subscribers in multiple markets across South Asia, the Middle East, Africa, Europe, Latin America, and Asia-Pacific will go up to €11.99 a month from €10.99 currently.
“To continue to innovate on our product offerings and features and bring users the best experience, we occasionally update our prices,” wrote Spotify in the release. Spotify has raised prices for its premium subscriptions in most markets several times in recent years. News of the latest price hike sent SPOT stock up sharply and has the shares on track for their best one-day performance since May 2 of this year.
Big Reversal
The jump on August 4 also represents a big reversal for SPOT stock after it suffered a post-earnings selloff. Spotify’s share price fell 12% on July 29 after the company reported a surprise second-quarter loss, and revenue that came in below Wall Street estimates.
Still, the company’s shares have skyrocketed 106% higher over the last 12 months as monthly active users and premium subscriber numbers continue to grow at a quick pace. Analysts have been calling for price increases from Spotify, with Deutsche Bank (DB) recently writing that there’s an “opportunity for SPOT to lean into price increases that could include both music and non-music content.”
Is SPOT Stock a Buy?
The stock of Spotify has a consensus Moderate Buy rating among 25 Wall Street analysts. That rating is based on 18 Buy and seven Hold recommendations issued in the last three months. The average SPOT price target of $763.75 implies 15.16% upside from current levels.
