From Nasdaq: 2024-09-19 13:36:00

Spotify Technology S.A. (SPOT) stock has surged 83% year to date, surpassing the industry rally of 23.4%. Closing at $343.97, near its 52-week high of $359.38, SPOT is trading above its 50-day moving average, indicating optimism among investors.

Spotify’s growth is driven by price hikes and gains in podcasts. Premium subscriber revenues account for 88% of total revenues, growing by 12% in Q2 2024. Ad-supported MAUs increased by 15%. Spotify’s gross profit expanded by 45%, with an operating loss turning into profit.

Competitors like GOOGL, AAPL, and AMZN raising prices highlight the industry trend. Spotify aims to increase revenue from podcasts and audiobooks. With over 250,000 video podcast shows, Spotify is focusing on content monetization to boost profitability.

Despite the rally, Spotify remains undervalued with a low price/sales ratio. The Relative Strength Index shows no signs of overbought conditions. SPOT’s liquidity is strong with a current ratio of 1.56, indicating stability and flexibility.

Analysts are optimistic about SPOT, with estimates rising for Q3 and 2024 earnings. The Zacks Consensus Estimate for Q3 2024 earnings is $1.83, expected to grow by 408.3% year over year. Revenues for 2024 are forecasted to increase by 19.4% year over year.

With solid fundamentals, undervaluation, and bullish momentum, Spotify is a must-buy for investors. Management projects growth in MAUs, premium subscribers, revenue, gross margin, and operating income for Q3. SPOT currently holds a Zacks Rank #1 (Strong Buy).



Read more at Nasdaq: Spotify Stock Rises 83% Year to Date: Is Your FOMO Warranted?