Canaccord notes Spotify (SPOT) reported Q2 results that were below guidance, with revenue growth impacted by the soft dollar and OI reflecting higher-than-contemplated social charges. Shares are under pressure on the print, reflecting the combination of currency headwinds, softness in the ads business, somewhat muted near-term ARPU growth and a greater-than-expected investment cycle. That said, with improving engagement and conversion, steady subscriber growth, pricing power, a renewed focus on turning around the ads business, and $1.9B in buyback authorization now available following a $1B upsize, the firm views the price action as an attractive buying opportunity. Canaccord has a Buy rating on the shares with a price target of $850.
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