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Spotify
(NYSE:SPOT)
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Rating:75Outperform
Price Target:
$517.00
▼(-3.65% Downside)
Action:Upgraded
Date:05/22/26
The score is driven primarily by materially improved financial performance (profitability, low leverage, and strong free cash flow) and a positive earnings call with constructive guidance and margin trajectory. These strengths are tempered by weaker technicals versus longer-term trend levels and a valuation that is not especially discounted given a ~29 P/E and no dividend yield.
Positive Factors
Low Leverage & Strong Balance Sheet
Spotify's materially reduced leverage and sharply-compounding equity provide durable financial flexibility. A strong balance sheet supports sustained investments in product, AI compute, content deals, buybacks and capital allocation without forcing near-term financing, reducing strategic risk over 2–6 months.
Negative Factors
Ad-Supported Revenue Weakness
Persistently slow ad revenue growth limits total revenue upside and makes overall top-line more dependent on Premium monetization. Given ads' lower margins historically, subdued ad traction could restrain long-term margin expansion and reduce diversification of revenue streams.
Read all positive and negative factors
Positive Factors
Negative Factors
Low Leverage & Strong Balance Sheet
Spotify's materially reduced leverage and sharply-compounding equity provide durable financial flexibility. A strong balance sheet supports sustained investments in product, AI compute, content deals, buybacks and capital allocation without forcing near-term financing, reducing strategic risk over 2–6 months.
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
$100.03B
Dividend YieldN/A
Average Volume (3M)2.23M
Price to Earnings (P/E)31.9
Beta (1Y)0.91
Revenue Growth16.70%
EPS Growth148.31%
CountryUS
Employees7,323
SectorCommunication Services
Sector Strength97
IndustryInternet Content & Information
Share Statistics
EPS (TTM)13.21
Shares Outstanding205,832,520
10 Day Avg. Volume1,949,819
30 Day Avg. Volume2,229,330
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 Cap0.77
Enterprise Value/Revenue4.37
Enterprise Value/Gross Profit13.51
Enterprise Value/Ebitda25.82
Forecast
1Y Price Target
$610.61Price Target Upside13.79% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering24
EPS Forecast (FY)12.68
Revenue Forecast (FY)$19.48B
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:Apr 28, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 04, 2026
Earnings Call Sentiment Positive
The call presents a largely positive operational and financial picture: MAU and revenue growth accelerated, Premium ARPU and gross margin expanded, operating income and free cash flow were strong, and AI-driven product adoption is gaining traction. That said, there are notable near-term challenges: ad-supported revenue growth is muted (~+3% YoY), ad gross margins experienced short-term weakness as engagement-driven content costs outpaced monetization, and operating expenses are elevated as Spotify invests in AI compute and marketing. Management expects these investments to pay off over time with improved monetization (biddable ads, product top-ups) and has provided constructive Q2 guidance, but near-term variability and execution on ad monetization and AI-related content/legal hurdles remain risks.Positive Updates
Monthly Active Users (MAU) Growth
MAUs reached 761 million (up 10 million q/q), accelerating to +12% year-over-year (from 11% in Q4) and surpassing guidance by ~2 million, driven by free tier enhancements in North America and Rest of World.
Negative Updates
Ad-Supported Revenue Sluggish
Ad-Supported revenue grew only ~3% year-over-year in Q1, lagging overall revenue growth and reflecting ongoing headwinds while legacy direct sales remain choppy despite programmatic gains.
Read all updates
Q1-2026 Updates
Positive
Negative
Monthly Active Users (MAU) Growth
MAUs reached 761 million (up 10 million q/q), accelerating to +12% year-over-year (from 11% in Q4) and surpassing guidance by ~2 million, driven by free tier enhancements in North America and Rest of World.
Read all positive updates
Company Guidance
Spotify guided to continued momentum into Q2 and the year: Q1 results included 761M MAUs (+10M, 12% y/y), 293M subscribers (+3M), total revenue €4.5B (+14% y/y), Premium revenue ~+15% y/y with Premium ARPU +5.7% y/y, Ad‑Supported revenue +3% y/y, gross margin 33% (+~133 bps y/y), operating income €715M (15.8% margin) and free cash flow €824M; they ended the quarter with €8.8B cash, repurchased $361M of stock and settled a $1.5B exchangeable note. For Q2 they forecast 778M MAUs (+17M vs Q1), ~299M subscribers (+6M), revenue ≈€4.8B (+15% y/y) with ARPU +7–7.5% y/y, gross margin ~33.1% (~+160 bps y/y) and operating income €630M; management expects full‑year 2026 gross and operating margin improvement, meaningful y/y free cash flow growth and a normalized tax rate in 2027. Additional metrics: IDJ ~94M users, Song DNA 52M users, automated sales >30% of Ad‑Supported revenue and biddable ads >1/3 of ad revenue.Spotify Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
88
Very Positive
Cash Flow
84
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 17.53B | 17.19B | 15.67B | 13.25B | 11.73B | 9.67B |
| Gross Profit | 5.67B | 5.50B | 4.72B | 3.40B | 2.93B | 2.59B |
| EBITDA | 2.96B | 2.36B | 1.50B | -309.00M | -158.00M | 416.00M |
| Net Income | 2.71B | 2.21B | 1.14B | -532.00M | -430.00M | -34.00M |
Balance Sheet | ||||||
| Total Assets | 13.14B | 15.01B | 12.00B | 8.38B | 7.57B | 7.19B |
| Cash, Cash Equivalents and Short-Term Investments | 8.76B | 9.46B | 7.45B | 4.23B | 3.32B | 3.51B |
| Total Debt | 476.50M | 2.32B | 2.00B | 1.70B | 1.67B | 1.79B |
| Total Liabilities | 5.12B | 6.68B | 6.48B | 5.85B | 5.19B | 5.07B |
| Stockholders Equity | 8.02B | 8.33B | 5.52B | 2.53B | 2.38B | 2.13B |
Cash Flow | ||||||
| Free Cash Flow | 3.18B | 2.87B | 2.28B | 674.00M | 21.00M | 276.00M |
| Operating Cash Flow | 3.24B | 2.93B | 2.30B | 680.00M | 46.00M | 361.00M |
| Investing Cash Flow | -726.96M | -1.78B | -1.49B | -217.00M | -423.00M | -187.00M |
| Financing Cash Flow | -2.14B | -381.00M | 729.00M | 234.00M | -40.00M | 1.25B |
Spotify Technical Analysis
Positive
536.61
Price Trends
468.56
Positive
483.66
Negative
544.09
Negative
Market Momentum
-2.06
Negative
54.26
Neutral
86.25
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 536.61 is above the 20-day moving average (MA) of 473.73, above the 50-day MA of 468.56, and below the 200-day MA of 544.09, indicating a neutral trend. The MACD of -2.06 indicates Negative momentum. The RSI at 54.26 is Neutral, neither overbought nor oversold. The STOCH value of 86.25 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 |
|---|---|---|---|---|---|---|---|
82 Outperform | $4.38T | 35.77 | 146.69% | 0.41% | 12.76% | 28.91% | |
75 Outperform | $100.03B | 31.95 | 35.18% | ― | 16.70% | 148.31% | |
75 Outperform | $12.70B | 10.53 | 10.97% | 1.02% | 17.25% | -3.49% | |
75 Outperform | $14.75B | 31.52 | 67.11% | 2.47% | 12.55% | -0.50% | |
72 Outperform | $325.83B | 24.43 | 49.24% | ― | 18.57% | 45.93% | |
67 Neutral | $12.36B | 45.66 | 7.76% | ― | 16.30% | -82.47% | |
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% |
* Communication Services Sector Average
SPOT
Spotify
483.01
-253.28
-34.40%
AAPL
Apple
312.66
103.54
49.51%
NFLX
Netflix
76.02
-52.94
-41.05%
TME
Tencent Music Entertainment Group
8.77
-10.76
-55.10%
PINS
Pinterest
22.25
-13.42
-37.62%
WMG
Warner Music Group
27.40
-1.48
-5.11%
Spotify Corporate Events
Spotify Posts Sharp Profit Increase on Higher Q1 2026 Revenue
Apr 28, 2026
Spotify Technology S.A., a leading global audio streaming provider of music and podcasts, reported its unaudited interim financial results for the three months ended March 31, 2026, showing continued expansion of its core subscription and ad-suppo...
Spotify Posts Record Q1 2026 Profitability as Users Reach 761 Million
Apr 28, 2026
On April 28, 2026, Spotify reported its Q1 2026 results, showing total monthly active users rising to 761 million and premium subscribers to 293 million, representing year-on-year growth of 12% and 9% respectively. Management highlighted that thes...
Spotify Shareholders Back Board, Auditor and New Buyback Authorization at 2026 AGM
Apr 15, 2026
Spotify Technology S.A. held its 2026 annual general meeting on April 15, 2026, where shareholders approved the annual and consolidated financial statements for the year ended December 31, 2025, the allocation of annual results, and the discharge ...
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.