Spotify (SPOT) AI Stock Analysis

• Market Cap: $142.53B
• Dividend Yield: N/A
• Average Volume (3M): 1.49M
• Price to Earnings (P/E): 165.9
• Beta (1Y): 0.95
• Revenue Growth: 15.52%
• EPS Growth: 67.15%
• Country: US
• Employees: 7,258
• Sector: Communication Services
• Sector Strength: 97
• Industry: Internet Content & Information
• EPS (TTM): -0.49
• Shares Outstanding: 205,777,760
• 10 Day Avg. Volume: 1,311,107
• 30 Day Avg. Volume: 1,488,083
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.06
• Enterprise Value/Revenue: 9.07
• Enterprise Value/Gross Profit: 28.67
• Enterprise Value/Ebitda: 106.08
• 1Y Price Target: $775.37
• Price Target Upside: 9.64% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 28

• Rating: 77 Outperform
• Price Target: $789.00 ▲(11.57% Upside)

Spotify's overall stock score is bolstered by strong financial performance and positive earnings call highlights, including user growth and strategic advancements. However, high valuation metrics and mixed technical signals slightly temper the outlook.

Positive Factors

Revenue Growth

Consistent revenue growth indicates Spotify's expanding market reach and effective monetization strategies, supporting long-term business sustainability.

User and Subscriber Growth

Strong user and subscriber growth enhances Spotify's market position, driving revenue potential and competitive advantage in the streaming industry.

Cash Flow Strength

Robust cash flow strengthens Spotify's liquidity, enabling reinvestment in growth initiatives and providing a buffer against financial uncertainties.

Negative Factors

Advertising Business Challenges

Underperformance in advertising limits revenue diversification and growth potential, posing a challenge to Spotify's overall business model.

Net Loss

The shift to a net loss highlights cost management challenges, which could impact profitability and necessitate strategic adjustments to sustain growth.

Operating Income Below Guidance

Falling short of operating income guidance indicates potential inefficiencies and cost pressures, affecting financial performance and investor confidence.

Spotify Business Overview & Revenue Model

Company Description

Spotify Technology S.A., together with its subsidiaries, provides audio streaming services worldwide. It operates through Premium and Ad-Supported segments. The Premium segment offers unlimited online and offline streaming access to its catalog of music and podcasts without commercial breaks to its subscribers. The Ad-Supported segment provides on-demand online access to its catalog of music and unlimited online access to the catalog of podcasts to its subscribers on their computers, tablets, and compatible mobile devices. The company also offers sales, marketing, contract research and development, and customer support services. As of December 31, 2021, its platform included 406 million monthly active users and 180 million premium subscribers in 184 countries and territories. The company was incorporated in 2006 and is based in Luxembourg, Luxembourg.

How the Company Makes Money

Spotify generates revenue through two primary streams: Premium subscriptions and advertising. The Premium subscription service offers users an ad-free experience with additional features such as offline listening and higher audio quality. This subscription model accounts for a significant portion of Spotify's revenue. Additionally, the company provides a free tier supported by advertising, where users can listen to music with commercial interruptions. Spotify partners with various brands for ad placements within its free service, which also contributes to its earnings. Furthermore, Spotify has entered into exclusive content agreements and partnerships with podcast creators and networks, enhancing its content offerings and attracting more users, thereby increasing its potential ad revenue.

Spotify Financial Statement Overview

Summary

Spotify's financial performance is strong, highlighted by a 5.97% revenue growth, improved profit margins, and robust cash flow. The balance sheet shows low leverage and high equity ratios, indicating financial stability.

Income Statement

Spotify's income statement shows robust growth with a revenue increase from $15.67 billion in 2024 to $16.61 billion in TTM (Trailing-Twelve-Months), marking a revenue growth rate of approximately 5.97%. The gross profit margin improved slightly to 31.62% in TTM, indicating efficient production. Net profit margin in TTM is at 4.85%, showing a positive turnaround from previous losses, which enhances profitability perception. EBIT margin improved significantly from 8.71% to 11.11% in TTM, reflecting better operational efficiency.

Balance Sheet

The balance sheet presents a strong financial position with a debt-to-equity ratio of 0.36, suggesting conservative leverage. The equity ratio stands at 49.22%, indicating a stable equity base. Return on equity (ROE) is at 12.16% for TTM, showing efficient utilization of equity to generate profits. The increase in stockholders' equity and total assets over time demonstrates a healthy financial trajectory.

Cash Flow

Spotify exhibits a strong cash flow position, with free cash flow growing by 23.47% from 2024 to TTM. Operating cash flow to net income ratio is 3.53, reflecting robust cash inflow relative to net earnings, enhancing liquidity. The free cash flow to net income ratio is exceptionally high at 3.50, indicating effective cash management and potential for reinvestment or debt reduction.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	16.61B	15.67B	13.25B	11.73B	9.67B	7.88B
Gross Profit	5.25B	4.72B	3.40B	2.93B	2.59B	2.02B
EBITDA	1.42B	1.50B	-309.00M	-158.00M	416.00M	-544.00M
Net Income	806.00M	1.14B	-532.00M	-430.00M	-34.00M	-581.00M
Balance Sheet
Total Assets	13.49B	12.00B	8.38B	7.57B	7.19B	6.32B
Cash, Cash Equivalents and Short-Term Investments	8.36B	7.45B	4.23B	3.32B	3.51B	1.74B
Total Debt	2.39B	2.00B	1.70B	1.67B	1.79B	576.28M
Total Liabilities	6.85B	6.48B	5.85B	5.19B	5.07B	3.52B
Stockholders Equity	6.64B	5.52B	2.53B	2.38B	2.13B	2.80B
Cash Flow
Free Cash Flow	2.82B	2.28B	674.00M	21.00M	276.00M	181.00M
Operating Cash Flow	2.85B	2.30B	680.00M	46.00M	361.00M	259.00M
Investing Cash Flow	-2.00B	-1.49B	-217.00M	-423.00M	-187.00M	-372.00M
Financing Cash Flow	480.00M	729.00M	234.00M	-40.00M	1.25B	285.00M

Spotify Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 707.19
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SPOT, the sentiment is Positive. The current price of 707.19 is above the 20-day moving average (MA) of 699.04, above the 50-day MA of 692.92, and above the 200-day MA of 612.28, indicating a bullish trend. The MACD of 3.07 indicates Negative momentum. The RSI at 53.72 is Neutral, neither overbought nor oversold. The STOCH value of 55.51 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SPOT.

Spotify Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GOOG	83 Outperform	3.02T	26.78	31.85%	0.33%	13.19%	34.51%
GOOGL	79 Outperform	3.02T	26.75	31.85%	0.33%	13.19%	34.51%
TME	79 Outperform	37.27B	27.58	9.79%	0.68%	10.66%	84.89%
PINS	78 Outperform	24.81B	13.04	40.02%	―	17.00%	901.05%
DASH	78 Outperform	110.75B	144.24	8.75%	―	23.78%	0.00%
SPOT	77 Outperform	$142.53B	165.88	13.94%	―	15.52%	67.15%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%

Spotify Corporate Events

Spotify Reports Q2 2025 Financial Results with Revenue Growth and Net Loss

Spotify Technology S.A. released its interim condensed consolidated financial statements for the three and six months ended June 30, 2025. The company reported a revenue increase to €4,193 million for the three months, up from €3,807 million in the same period in 2024, indicating a strong financial performance. However, the net loss attributable to owners of the parent was €86 million, compared to a net income of €274 million in the previous year, highlighting challenges in managing costs and financial expenses. This financial update reflects Spotify’s ongoing efforts to balance growth with profitability, impacting its operational strategies and stakeholder expectations.

Spotify Reports Strong Q2 2025 Results with Record Free Cash Flow

On July 29, 2025, Spotify Technology S.A. reported its Q2 2025 financial results, highlighting significant growth in monthly active users and premium subscribers, with a 15% year-over-year revenue increase on a constant currency basis. Despite facing challenges such as unfavorable currency movements and increased social charges, the company achieved a record high free cash flow of €700 million and maintained a strong liquidity position. Spotify’s strategic initiatives, including expanding audiobook offerings and launching new features like voice-activated DJ, are expected to support its long-term growth and margin improvement.