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Spotify (SPOT) Increases Despite Market Slip: Here's What You Need to Know

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Spotify (SPOT - Free Report) closed the latest trading day at $383.96, indicating a +0.95% change from the previous session's end. This move outpaced the S&P 500's daily loss of 0.19%. Meanwhile, the Dow experienced a drop of 0.7%, and the technology-dominated Nasdaq saw an increase of 0.04%.

The the stock of music-streaming service operator has risen by 12.05% in the past month, leading the Business Services sector's gain of 4.37% and the S&P 500's gain of 1.95%.

The upcoming earnings release of Spotify will be of great interest to investors. It is anticipated that the company will report an EPS of $1.82, marking a 405.56% rise compared to the same quarter of the previous year. At the same time, our most recent consensus estimate is projecting a revenue of $4.38 billion, reflecting a 19.83% rise from the equivalent quarter last year.

SPOT's full-year Zacks Consensus Estimates are calling for earnings of $6.26 per share and revenue of $17.1 billion. These results would represent year-over-year changes of +312.2% and +19.36%, respectively.

Investors should also pay attention to any latest changes in analyst estimates for Spotify. Recent revisions tend to reflect the latest near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the company's business and profitability.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 1.77% downward. Spotify is currently a Zacks Rank #4 (Sell).

Investors should also note Spotify's current valuation metrics, including its Forward P/E ratio of 60.75. Its industry sports an average Forward P/E of 24.3, so one might conclude that Spotify is trading at a premium comparatively.

The Technology Services industry is part of the Business Services sector. At present, this industry carries a Zacks Industry Rank of 68, placing it within the top 27% of over 250 industries.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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