Music streaming giant Spotify (SPOT) is set to release its third-quarter earnings results for the fiscal year 2025 tomorrow, likely before the U.S. market opens. Analysts on Wall Street believe its new pricing strategy, among other factors, will fuel its growth.
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What Does Wall Street Expect from Spotify?
First, the numbers. Analysts expect the Stockholm-based company to boost its earnings per share by more than 35% to $2.28, up from $1.68 posted in the same period last year.
Similarly, Spotify’s revenue is anticipated to rise 6% to reach $4.86 billion in the three months ending September 2025. This would be up from $4.58 billion in the same quarter last year.
Analysts Watch Spotify’s Price Shifts
Beyond the numbers, analysts and investors will be watching the influence of Spotify’s pricing model in the recent quarter.
During its second quarter, the streaming platform’s revenue came in at $4.76 billion, below Wall Street’s forecast of $4.94 billion, though it jumped from $4.10 billion year-over-year. This is even as the company’s subscriber base expanded by over 30% compared to the same period last year.
Subscribers reached almost 700 million globally, with over 100 million in Europe. Already, Spotify has increased the price of its premium subscription by 8.3% to £12.99 a month for users in the U.K.
Citi analyst Jason Bazinet, who recently maintained his Neutral/Hold rating on SPOT stock, believes the Swedish streaming giant will also raise subscription prices in the U.S. in the next few months. Bazinet added Spotify to its “upside 90-day catalyst watch,” believing that the subscription price increase will positively impact the company’s stock over the next three months.
Spotify’s AI Integration Efforts Get Attention
Similarly, Morgan Stanley analyst Benjamin Swinburne, who recently reiterated an Overweight rating on SPOT, believes the entertainment company has added “significant value” to its free and premium subscriptions.
Swinburne argued that its new pricing cycle, especially in the premium segment, is expected to fuel its growth into next year. Bernstein analyst Ian Moore also expressed a similar sentiment on the industry’s search for pricing opportunities.
Meanwhile, Swinburne also pointed to Spotify’s integration of artificial intelligence into its platform as an additional growth pipeline, among other factors. This is even as Spotify recently teamed up with Sony (SONY), Universal (UMGNF), and Warner (WMG) to develop “responsible” AI features, while also exploring integrating its platform into ChatGPT.
Is Spotify a Good Stock to Buy?
Across Wall Street, Spotify’s shares currently have a Strong Buy consensus rating. This is based on 19 Buys and five Holds assigned by 24 analysts over the past three months.
Moreover, at $792.67, the average SPOT price target implies 21% upside from the current level.
