Spotify stock surges 142% in 2024, driven by revenue growth and strategic price increases

From Nasdaq: 2024-12-20 15:00:00

Spotify Technology S.A. stock (SPOT) has surged 142% this year, surpassing the technology services industry and the Zacks S&P 500 composite. The company’s revenue growth rebounded in 2024, driven by strategic price increases and strong performance in the third quarter, with a 19% revenue increase and 12% growth in premium subscribers.

Spotify’s platform-based business model, AI-driven personalization, and programmatic ad tools enhance engagement and boost ad revenues. The company is well-positioned to implement additional price increases to strengthen free cash flow in 2025. However, competition, reliance on third-party content licenses, and elevated valuations pose risks to SPOT’s stock performance.

Analyst revisions reflect caution, with some downward revisions for fourth-quarter and full-year 2024 earnings estimates. Despite an impressive 136% surge in 2024 driven by revenue growth and efficiency, investors are advised to adopt a “Hold” strategy due to challenges like competition, reliance on licenses, and high valuations. SPOT currently has a Zacks Rank #3 (Hold).

Zacks Investment Research names a top semiconductor stock with strong earnings growth and a growing customer base, poised to meet the increasing demand for AI, ML, and IoT. Global semiconductor manufacturing is projected to rise from $452 billion in 2021 to $803 billion by 2028. Investors can access this stock recommendation for free to capitalize on the industry’s growth potential.



Read more at Nasdaq: Spotify Stock Soars Over 100% in 2024: Is More Upside Ahead?