Spotify (SPOT)
NYSE:SPOT
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Spotify
(NYSE:SPOT)
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Rating:65Neutral
Price Target:
$555.00
▲(14.87% Upside)
Action:ReiteratedDate:02/12/26
The score is driven primarily by materially improved profitability, margins, and strong free cash flow, reinforced by constructive Q1 2026 guidance and management’s expectation for further margin and cash flow gains. These positives are tempered by very weak technicals (sharp downtrend with negative momentum) and a premium valuation that leaves less room for execution missteps, alongside near-term risks around advertising softness, FX headwinds, and potential churn from pricing.
Positive Factors
Margin expansion and profitability
Spotify’s shift to sustained profitability with mid‑teens operating margins and a ~32% gross margin indicates durable operating leverage: pricing and mix improvements plus content/margin management can support cash generation and reinvestment capacity for product and distribution over the next 2–6 months and beyond.
Negative Factors
Weak advertising growth
Advertising is a key second pillar for Spotify’s model; low single‑digit ad growth implies slower diversification of revenue and makes overall growth more dependent on subscription pricing and ARPU improvements, increasing sensitivity to subscriber trends and advertiser demand cycles.
Read all positive and negative factors
Positive Factors
Negative Factors
Margin expansion and profitability
Spotify’s shift to sustained profitability with mid‑teens operating margins and a ~32% gross margin indicates durable operating leverage: pricing and mix improvements plus content/margin management can support cash generation and reinvestment capacity for product and distribution over the next 2–6 months and beyond.
Read all positive factors
Spotify (SPOT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$99.45B
Dividend YieldN/A
Average Volume (3M)2.01M
Price to Earnings (P/E)45.9
Beta (1Y)1.00
Revenue Growth14.10%
EPS Growth102.32%
CountryUS
Employees7,258
SectorCommunication Services
Sector Strength97
IndustryInternet Content & Information
Share Statistics
EPS (TTM)5.17
Shares Outstanding205,832,520
10 Day Avg. Volume1,294,107
30 Day Avg. Volume2,007,195
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 Cap0.83
Enterprise Value/Revenue4.79
Enterprise Value/Gross Profit14.99
Enterprise Value/Ebitda34.95
Forecast
1Y Price Target
$643.78Price Target Upside33.24% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering24
EPS Forecast (FY)12.96
Revenue Forecast (FY)$19.49B
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...
How the Company Makes Money
Spotify primarily makes money through two revenue streams: Premium subscriptions and Advertising. (1) Premium subscriptions: Users pay recurring subscription fees (with plan variants such as individual, student, family, or other market-specific ti...
Spotify Key Performance Indicators (KPIs)
Any
Revenue by Geography
Breaks down revenue across different regions, revealing where Spotify is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Breaks down revenue across different regions, revealing where Spotify is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Data provided by:
The Fly
The FlySpotify Earnings Call Summary
Earnings Call Date:Feb 10, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 28, 2026
Earnings Call Sentiment Positive
The call emphasized robust user growth, accelerating premium revenue, expanding margins, strong cash generation, and significant product and AI-driven engagement milestones. Management acknowledged near-term challenges in advertising growth, currency headwinds, AI-related content moderation risks, and potential quarterly margin variability, but presented clear plans and optimism for 2026 execution, monetization, and further AI-driven product differentiation.Positive Updates
Strong Top-Line Growth
Total revenue grew 13% year-over-year to $4,500,000,000 in Q4 2025, and full-year 2025 revenue also grew 13%.
Negative Updates
Slow Advertising Growth
Advertising revenue grew just 4% year-over-year in Q4 (flat the prior quarter). On a like-for-like basis excluding podcast optimization effects, advertising grew ~7%, indicating ad business recovery is still nascent and requires further execution.
Read all updates
Q4-2025 Updates
Positive
Negative
Strong Top-Line Growth
Total revenue grew 13% year-over-year to $4,500,000,000 in Q4 2025, and full-year 2025 revenue also grew 13%.
Read all positive updates
Company Guidance
Spotify guided Q1 2026 to 759,000,000 MAUs (up 8,000,000 from Q4) and 293,000,000 Premium subscribers (implying ~3,000,000 net adds in the seasonally small quarter), with total Q1 revenue of $4.5 billion (≈15% YoY growth), ARPU growth of 5–6%, a Q1 gross margin of 32.8% and operating income of $660 million; the outlook factors in an incremental €35 million FX headwind and churn from recent price increases that is in line with expectations. Management also expects both gross margin and operating margin to improve in 2026 (pricing expected to outpace net content cost), and free cash flow to meaningfully exceed 2025 while progressing toward a normalized long‑term tax rate; for context, 2025 full‑year revenue grew 13%, gross profit grew 20%, operating income rose >50% to a 13% full‑year margin, 2025 free cash flow was ~DKK 2.9 billion, Q4 free cash flow was $834 million, and cash & short‑term investments ended at $9.5 billion.Spotify Financial Statement Overview
Summary
Income Statement
76
Positive
Balance Sheet
74
Positive
Cash Flow
70
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 17.19B | 15.67B | 13.25B | 11.73B | 9.67B |
| Gross Profit | 5.50B | 4.72B | 3.40B | 2.93B | 2.59B |
| EBITDA | 2.36B | 1.50B | -309.00M | -158.00M | 416.00M |
| Net Income | 2.21B | 1.14B | -532.00M | -430.00M | -34.00M |
Balance Sheet | |||||
| Total Assets | 15.01B | 12.00B | 8.38B | 7.57B | 7.19B |
| Cash, Cash Equivalents and Short-Term Investments | 9.46B | 7.45B | 4.23B | 3.32B | 3.51B |
| Total Debt | 2.32B | 2.00B | 1.70B | 1.67B | 1.79B |
| Total Liabilities | 6.68B | 6.48B | 5.85B | 5.19B | 5.07B |
| Stockholders Equity | 8.33B | 5.52B | 2.53B | 2.38B | 2.13B |
Cash Flow | |||||
| Free Cash Flow | 2.87B | 2.28B | 674.00M | 21.00M | 276.00M |
| Operating Cash Flow | 2.93B | 2.30B | 680.00M | 46.00M | 361.00M |
| Investing Cash Flow | -1.78B | -1.49B | -217.00M | -423.00M | -187.00M |
| Financing Cash Flow | -381.00M | 729.00M | 234.00M | -40.00M | 1.25B |
Spotify Technical Analysis
Negative
483.17
Price Trends
489.53
Negative
531.26
Negative
611.58
Negative
Market Momentum
-6.32
Positive
46.72
Neutral
63.69
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SPOT, the sentiment is Negative. The current price of 483.17 is below the 20-day moving average (MA) of 491.69, below the 50-day MA of 489.53, and below the 200-day MA of 611.58, indicating a bearish trend. The MACD of -6.32 indicates Positive momentum. The RSI at 46.72 is Neutral, neither overbought nor oversold. The STOCH value of 63.69 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 |
|---|---|---|---|---|---|---|---|
80 Outperform | $3.80T | 23.95 | 159.94% | 0.41% | 10.07% | 25.58% | |
76 Outperform | $419.64B | 36.11 | 43.25% | ― | 15.49% | 35.54% | |
71 Outperform | $13.44B | 17.48 | 13.77% | 1.02% | 13.86% | 80.97% | |
68 Neutral | $11.60B | 41.90 | 8.74% | ― | 16.79% | 819.94% | |
65 Neutral | $99.45B | 45.90 | 30.51% | ― | 14.10% | 102.32% | |
61 Neutral | $14.38B | 22.61 | 48.36% | 2.47% | 4.37% | -16.22% | |
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% |
* Communication Services Sector Average
SPOT
Spotify
483.17
-85.89
-15.09%
AAPL
Apple
258.90
60.91
30.77%
NFLX
Netflix
99.39
4.84
5.12%
TME
Tencent Music Entertainment Group
9.39
-2.93
-23.78%
PINS
Pinterest
18.10
-10.04
-35.68%
WMG
Warner Music Group
27.53
-1.46
-5.03%
Spotify Corporate Events
Spotify Sets April 15, 2026 AGM, Seeks Approval for 10 Million‑Share Buyback Mandate
Mar 5, 2026
Spotify Technology S.A. has called its 2026 annual general meeting for April 15, 2026 in Luxembourg, inviting shareholders and holders of beneficiary certificates of record as of February 19, 2026 to attend or vote by proxy. The agenda includes ap...
Spotify Delivers Record Users, Margin Gains and €2.9 Billion Free Cash Flow in 2025
Feb 10, 2026
Spotify reported strong fourth-quarter and full-year 2025 results on February 10, 2026, with all key performance indicators meeting or exceeding guidance and record user growth. Monthly active users rose 11% year-on-year to 751 million, including ...
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.