Catalysts (optional)
- User Growth and Engagement Will Remain The Focus Over Profitability
- Streaming Economics Will Favour The Suppliers, Users AND The Aggregators.
- Being An Audio Platform Will Lead To Less Reliance on Variable-Cost Music
- The Market Will Come To Understand Spotify’s Current and Future Profitability
Assumptions (optional)
- Retain Dominant Market Share Position In Paid Music Streaming
- 325m paid subs by 2028 (35% of 930m market).
- ARPU to Climb From Price Increases And New Revenue Streams
- From €4.5 to €7
- Revenues of €27.3bn
- Gross Margins to Rise From New Deals And Revenue Sources
- From 24.1% to 30% by 2028
- Net Cash Flow Margins To Improve Dramatically
- From 1.5% to 9% by 2028
- €2.46bn in FCF by 2028
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Michael1234 is an employee of Simply Wall St, but has written this narrative in their capacity as an individual investor. Michael1234 holds no position in NYSE:SPOT. Simply Wall St has no position in any companies mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. This narrative is general in nature and explores scenarios and estimates created by the author. The narrative does not reflect the opinions of Simply Wall St, and the views expressed are the opinion of the author alone, acting on their own behalf. These scenarios are not indicative of the company's future performance and are exploratory in the ideas they cover. The fair value estimate's are estimations only, and does not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that the author's analysis may not factor in the latest price-sensitive company announcements or qualitative material.
