If you are already familiar with what a “rickroll” is, then this news will likely not hit you as hard as it might. But for those less familiar, it is a combination meme and reaction video that features people surprised by the Rick Astley song Never Gonna Give You Up. This unexpected new life for a 1980s song has prompted an equally unexpected shift for streaming music giant Spotify (SPOT), as the song managed to hit the “Billions Club” on the platform. That in turn had a welcome effect for Spotify shareholders, who sent shares mounting over 2% in Thursday afternoon’s trading.
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Just days ago, Astley’s 38 year old song—recorded when he was just 21—cleared its one billionth streamer on the platform, noted a report from CNBC. The report found that Astley himself was astonished that this had happened, and credited streaming platforms like Spotify with allowing “…a whole new generation…to discover music like mine.”
Of course, much of the popularity of Astley’s song goes back to the “rickrolling” phenomenon, in which users trick other users into watching the music video of the song after promising a different video under a much more sensational topic. It is also unclear how much money Astley has made from the song’s resurgence, as most streamers, distributors and other labels will not share these figures. Astley himself has not even tried to investigate the matter for himself, reports note.
All That and a Fresh New Buy Rating
Meanwhile, analysts came out in favor on Spotify’s side, as Ian Moore, an analyst with Bernstein, started up coverage on Spotify. Moore gave the stock an Outperform rating and set a price target of $825 per share.
Moore notes that there is a “…strong investment case for Spotify…” thanks to a combination of “…its sizable market share and quality platform.” Further, Moore looked for “regular price increases…” to be a helpful driver of further revenue, and with more and more non-music content hitting the platform like podcasts, that should only help improve things further as Spotify becomes a central hub for audio content of all stripes.
Is Spotify Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Strong Buy consensus rating on SPOT stock based on 19 Buys, eight Holds and one Sell assigned in the past three months, as indicated by the graphic below. After a 119.42% rally in its share price over the past year, the average SPOT price target of $672.19 per share implies 5.82% downside risk.
