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Spotify
(NYSE:SPOT)
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Rating:78Outperform
Price Target:
$556.00
▲(15.19% Upside)
Action:Reiterated
Date:08/10/26
The score is driven primarily by improved financial performance (strong margins, strong cash generation, and low leverage) and a constructive earnings call with continued margin expansion and solid guidance. Offsetting these positives, technicals are mixed with the stock still below its 200-day moving average and ad-supported revenue growth remains a key execution risk; valuation is moderate with a ~25 P/E and no dividend yield data.
Positive Factors
Premium scale and revenue growth
A 300 million subscriber base provides substantial recurring revenue scale, while subscriber growth and higher ARPU support continued premium expansion. This strengthens Spotify’s global market position and improves its ability to fund product investment.
Negative Factors
Weak ad-supported monetization
Advertising remains an important monetization channel, but limited growth shows that Spotify has not yet fully converted audience scale into ad revenue. Continued weakness could constrain revenue mix improvement and reduce operating leverage.
Read all positive and negative factors
Positive Factors
Negative Factors
Premium scale and revenue growth
A 300 million subscriber base provides substantial recurring revenue scale, while subscriber growth and higher ARPU support continued premium expansion. This strengthens Spotify’s global market position and improves its ability to fund product investment.
Read all positive factors
Spotify Key Performance Indicators (KPIs)
Any
Revenue by Geography
Breaks down sales across regions to reveal where Spotify is strongest, where growth is accelerating, and where it’s exposed to slowing ad markets or weaker subscription uptake. Heavy dependence on a few markets increases risk, while expanding revenue in emerging regions points to future scale.
Breaks down sales across regions to reveal where Spotify is strongest, where growth is accelerating, and where it’s exposed to slowing ad markets or weaker subscription uptake. Heavy dependence on a few markets increases risk, while expanding revenue in emerging regions points to future scale.
Data provided by:
The Fly
The FlySpotify (SPOT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$109.76B
Dividend YieldN/A
Average Volume (3M)1.63M
Price to Earnings (P/E)27.4
Beta (1Y)0.93
Revenue Growth16.91%
EPS Growth346.36%
CountryUS
Employees7,000
SectorCommunication Services
Sector Strength97
IndustryInternet Content & Information
Share Statistics
EPS (TTM)16.66
Shares Outstanding205,882,340
10 Day Avg. Volume1,460,284
30 Day Avg. Volume1,626,609
Financial Highlights & Ratios
PEG Ratio0.51
Price to Book (P/B)12.19
Price to Sales (P/S)5.91
P/FCF Ratio35.35
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$605.57Price Target Upside25.47% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering23
EPS Forecast (FY)12.26
Revenue Forecast (FY)$19.53B
Spotify Business Overview & Revenue Model
Company Description
Spotify Technology S.A., together with its subsidiaries, provides audio streaming subscription services worldwide. It operates in two segments, Premium and Ad-Supported. The Premium segment offers online and offline streaming access to its catalog...
How the Company Makes Money
Spotify primarily makes money through two revenue streams: (1) Premium subscriptions and (2) Advertising-supported listening. Premium revenue comes from monthly subscription fees paid by individual users and multi-user plans (e.g., family/duo) and...
Spotify Earnings Call Summary
Earnings Call Date:Aug 04, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 27, 2026
Earnings Call Sentiment Positive
The call emphasized strong execution: accelerating revenue growth (15% YoY), record gross margin (33.4%), robust free cash flow (EUR 797M, +14% YoY), meaningful product and AI adoption, and strategic monetization initiatives (Reserved, Audiobooks+, add-ons). Near-term headwinds include modest ad-supported revenue growth (3% YoY), intentional product changes in emerging markets expected to weigh on short-term MAU, and ~EUR 200M of planned incremental marketing and AI spend driving quarter variability in operating expenses. On balance, the scale of financial and product fundamentals and clear path to improved ad monetization and add-on revenue outweigh the contained short-term trade-offs.Positive Updates
Top-Line Revenue Acceleration
Total revenue EUR 4.8B in Q2 2026, up 15% year-over-year on a constant currency basis (accelerated from 14% in Q1). Q3 revenue guide ~EUR 5.0B (~14% YoY).
Negative Updates
Sluggish Ad-Supported Revenue Growth
Ad-supported revenue grew only ~3% YoY in Q2, consistent with Q1. Direct sales declines offset programmatic/automated gains; management expects ads to inflect to double-digit growth in H2 but recovery remains in progress.
Read all updates
Q2-2026 Updates
Positive
Negative
Top-Line Revenue Acceleration
Total revenue EUR 4.8B in Q2 2026, up 15% year-over-year on a constant currency basis (accelerated from 14% in Q1). Q3 revenue guide ~EUR 5.0B (~14% YoY).
Read all positive updates
Company Guidance
Spotify’s Q3 2026 guidance calls for MAUs of 788 million (+11M Q/Q), 305 million subscribers (net adds ~5M) and total revenue of ~€5.0 billion (~+14% YoY), with gross margin ~32.9% (~+130 bps YoY) and operating income of €670 million; management expects the ads business to inflect to double‑digit growth in H2 2026 and reiterated full‑year improvement in gross and operating margins. For context, Q2 delivered 12% YoY MAU growth, 7 million net subscriber adds (finished at 300M, +1M vs. guidance), total Q2 revenue €4.8B (+15% YoY), premium revenue ≈+16% YoY (subs +9% YoY; ARPU +7.4% YoY), ad‑supported revenue +3% YoY (automated channels ≈40% of ad revenue; active advertisers ~33,000, +60% YoY), Q2 gross margin 33.4% (beat by 30 bps), Q2 operating income €655M (vs. guidance €630M), Q2 free cash flow €797M (+14% YoY), cash €9.4B/no debt, YTD buybacks $662M (~2.2M shares, ~1% outstanding), and the company expects ~€200M of incremental 2026 operating expense for marketing and AI (headcount flat) with heavier spend in Q2–Q3 and moderation into Q4.Spotify Financial Statement Overview
Summary
Income Statement
88
Very Positive
Balance Sheet
86
Very Positive
Cash Flow
83
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 18.80B | 17.19B | 15.67B | 13.25B | 11.73B | 9.67B |
| Gross Profit | 6.17B | 5.50B | 4.72B | 3.40B | 2.93B | 2.59B |
| EBITDA | 3.75B | 2.36B | 1.50B | -309.00M | -158.00M | 416.00M |
| Net Income | 3.42B | 2.21B | 1.14B | -532.00M | -430.00M | -34.00M |
Balance Sheet | ||||||
| Total Assets | 15.71B | 15.01B | 12.00B | 8.38B | 7.57B | 7.19B |
| Cash, Cash Equivalents and Short-Term Investments | 10.73B | 9.46B | 7.45B | 4.23B | 3.32B | 3.51B |
| Total Debt | 532.67M | 2.32B | 2.00B | 1.70B | 1.67B | 1.79B |
| Total Liabilities | 6.13B | 6.68B | 6.48B | 5.85B | 5.19B | 5.07B |
| Stockholders Equity | 9.58B | 8.33B | 5.52B | 2.53B | 2.38B | 2.13B |
Cash Flow | ||||||
| Free Cash Flow | 3.39B | 2.87B | 2.28B | 674.00M | 21.00M | 276.00M |
| Operating Cash Flow | 3.47B | 2.93B | 2.30B | 680.00M | 46.00M | 361.00M |
| Investing Cash Flow | -252.09M | -1.78B | -1.49B | -217.00M | -423.00M | -187.00M |
| Financing Cash Flow | -2.40B | -381.00M | 729.00M | 234.00M | -40.00M | 1.25B |
Spotify Technical Analysis
Positive
482.66
Price Trends
486.34
Positive
483.24
Positive
511.51
Positive
Market Momentum
10.80
Negative
61.32
Neutral
83.32
Negative
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 482.66 is below the 20-day moving average (MA) of 504.26, below the 50-day MA of 486.34, and below the 200-day MA of 511.51, indicating a bullish trend. The MACD of 10.80 indicates Negative momentum. The RSI at 61.32 is Neutral, neither overbought nor oversold. The STOCH value of 83.32 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SPOT.
Spotify Risk Analysis
Spotify disclosed 57 risk factors in its most recent earnings report. Spotify reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Spotify Peers Comparison
UnderperformOutperform
Sector (60)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $109.76B | 27.43 | 40.52% | ― | 16.91% | 346.36% | |
75 Outperform | $4.54T | 35.31 | 137.18% | 0.32% | 14.24% | 32.57% | |
75 Outperform | $333.70B | 24.64 | 47.96% | ― | 17.62% | 34.80% | |
75 Outperform | $13.54B | 10.35 | 11.23% | 2.71% | 15.72% | -8.96% | |
69 Neutral | $13.16B | 66.86 | 6.50% | ― | 16.64% | -87.65% | |
62 Neutral | $14.18B | 21.03 | 90.84% | 2.86% | 12.91% | 125.41% | |
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% |
* Communication Services Sector Average
SPOT
Spotify
533.72
-161.07
-23.18%
AAPL
Apple
309.35
83.03
36.69%
NFLX
Netflix
79.59
-42.22
-34.66%
TME
Tencent Music Entertainment Group
8.80
-16.27
-64.90%
PINS
Pinterest
23.40
-12.11
-34.10%
WMG
Warner Music Group
27.13
-6.08
-18.30%
Spotify Corporate Events
Spotify Posts Strong Q2 2026 Earnings With Return to Profitability
Aug 4, 2026
Spotify Technology S.A. has filed a Form 6-K with the U.S. Securities and Exchange Commission for August 2026, publishing unaudited interim condensed consolidated financial statements for the three and six months ended June 30, 2026. The release s...
Spotify Hits 300 Million Premium Subscribers as Q2 2026 Margins Reach Record High
Aug 4, 2026
On August 4, 2026, Spotify reported Q2 2026 results showing solid expansion in both users and financial performance, with Monthly Active Users rising 12% year-on-year to 777 million and premium subscribers climbing 9% to a milestone 300 million. T...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.