DB:639

Stock Analysis Report

Spotify Technology

Executive Summary

Spotify Technology S.A., together with its subsidiaries, provides music streaming services worldwide.


Snowflake Analysis

Excellent balance sheet with reasonable growth potential.


Similar Companies

Share Price & News

How has Spotify Technology's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 639 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-4.0%

639

2.2%

DE Entertainment

2.0%

DE Market


1 Year Return

-0.03%

639

36.6%

DE Entertainment

15.1%

DE Market

Return vs Industry: 639 underperformed the German Entertainment industry which returned 38.3% over the past year.

Return vs Market: 639 underperformed the German Market which returned 15% over the past year.


Shareholder returns

639IndustryMarket
7 Day-4.0%2.2%2.0%
30 Day-2.0%0.7%1.0%
90 Day6.2%8.1%3.8%
1 Year-0.03%-0.03%38.5%36.6%18.6%15.1%
3 Yearn/a44.6%38.1%16.8%6.6%
5 Yearn/a112.0%95.1%23.7%6.7%

Price Volatility Vs. Market

How volatile is Spotify Technology's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Spotify Technology undervalued compared to its fair value and its price relative to the market?

13.6%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 639 (€131.1) is trading below our estimate of fair value (€151.81)

Significantly Below Fair Value: 639 is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: 639 is unprofitable, so we can't compare its PE Ratio to the Entertainment industry average.

PE vs Market: 639 is unprofitable, so we can't compare its PE Ratio to the German market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate 639's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: 639 is overvalued based on its PB Ratio (11.8x) compared to the DE Entertainment industry average (1.5x).


Next Steps

Future Growth

How is Spotify Technology forecast to perform in the next 1 to 3 years based on estimates from 27 analysts?

52.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 639 is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (-0.4%).

Earnings vs Market: 639 is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: 639's is expected to become profitable in the next 3 years.

Revenue vs Market: 639's revenue (16.4% per year) is forecast to grow faster than the German market (5% per year).

High Growth Revenue: 639's revenue (16.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 639's Return on Equity is forecast to be low in 3 years time (6.6%).


Next Steps

Past Performance

How has Spotify Technology performed over the past 5 years?

30.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 639 is currently unprofitable.

Growing Profit Margin: 639 is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: 639 is unprofitable, but has reduced losses over the past 5 years at a rate of 30.8% per year.

Accelerating Growth: Unable to compare 639's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: 639 is unprofitable, making it difficult to compare its past year earnings growth to the Entertainment industry (29.1%).


Return on Equity

High ROE: 639 has a negative Return on Equity (-9.13%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Spotify Technology's financial position?


Financial Position Analysis

Short Term Liabilities: 639's short term assets (€2.2B) do not cover its short term liabilities (€2.4B).

Long Term Liabilities: 639's short term assets (€2.2B) exceed its long term liabilities (€646.0M).


Debt to Equity History and Analysis

Debt Level: 639 is debt free.

Reducing Debt: 639 had no debt 5 years ago.


Balance Sheet

Inventory Level: 639 has a low level of unsold assets or inventory.

Debt Coverage by Assets: Insufficient data to determine if 639's debt is covered by short term assets.


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: Whilst unprofitable 639 has sufficient cash runway for more than 3 years if it maintains its current positive free cash flow level.

Forecast Cash Runway: 639 is unprofitable but has sufficient cash runway for more than 3 years, due to free cash flow being positive and growing by 55.2% per year.


Next Steps

Dividend

What is Spotify Technology's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%1.3%markettop25%3.6%industryaverage1.2%forecastin3Years0%

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate 639's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate 639's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if 639's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if 639's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of 639's dividend in 3 years as they are not forecast to pay a notable one for the German market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.7yrs

Average management tenure


CEO

Daniel Ek (35yo)

€336,462

Compensation

Mr. Daniel G. Ek founded Spotify Limited in 2006 and serves as its Chief Executive Officer. Mr. Ek is Founder, Chief Executive Officer and Chairman of Spotify Technology S.A. He has been a Director of Spot ...


CEO Compensation Analysis

Compensation vs Market: Daniel's total compensation ($USD336.46K) is below average for companies of similar size in the German market ($USD4.37M).

Compensation vs Earnings: Daniel's compensation has increased whilst the company is unprofitable.


Leadership Team

NamePositionTenureCompensationOwnership
Daniel Ek
Founder0yrs€336.46k8.24% 2.0b
Martin Lorentzon Sven
Co-Founder & Director11.6yrs€390.18k0.0015% 359.8k
Alex Norström
Chief Premium Business Officer0yrs€6.43m0.00089% 213.5k
Gustav Söderström
Chief Research & Development Officer0yrs€7.12m0.0032% 770.0k
Dawn Ostroff
Chief Content Officer1.7yrs€7.48mno data
Paul Vogel
Chief Financial Officer0.08yrsno datano data
Paul Sawyer
Controller & Chief Accounting Officer0.4yrsno datano data
Horacio Gutierrez
Head of Global Affairs & Chief Legal Officer4.1yrsno datano data
Katarina Berg
Chief Human Resources Officer0yrsno data0.0078% 1.9m
Cecilia Qvist
Global Head of Markets0yrsno datano data

1.7yrs

Average Tenure

47yo

Average Age

Experienced Management: 639's management team is not considered experienced ( 1.7 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Daniel Ek
Founder0yrs€336.46k8.24% 2.0b
Martin Lorentzon Sven
Co-Founder & Director11.6yrs€390.18k0.0015% 359.8k
Christopher Marshall
Independent Director4.7yrs€367.76kno data
Thomas Staggs
Independent Director2.7yrs€364.29k0.017% 4.2m
Shishir Mehrotra
Independent Director2.7yrs€377.60k0.049% 11.8m
Padmasree Warrior
Independent Director2.7yrs€327.05k0.00063% 151.1k
Cristina Stenbeck
Independent Director2.7yrs€352.56k0.00063% 151.1k
Theodore Sarandos
Independent Director3.4yrs€367.76k0.0036% 868.4k
Heidi O'Neill
Independent Director2.2yrs€341.33k0.00046% 110.3k
W. McCarthy
Director0.08yrs€7.25m0.077% 18.6m

2.7yrs

Average Tenure

52yo

Average Age

Experienced Board: 639's board of directors are not considered experienced ( 2.7 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 2.1%.


Top Shareholders

Company Information

Spotify Technology S.A.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Spotify Technology S.A.
  • Ticker: 639
  • Exchange: DB
  • Founded: 2006
  • Industry: Movies and Entertainment
  • Sector: Media
  • Market Cap: US$25.990b
  • Listing Market Cap: US$23.989b
  • Shares outstanding: 184.33m
  • Website: https://www.spotify.com

Number of Employees


Location

  • Spotify Technology S.A.
  • 42-44, avenue de la Gare
  • Luxembourg City
  • 1610
  • Luxembourg

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SPFSWX (SIX Swiss Exchange)YesCommon SharesCHCHFApr 2018
0SPTLSE (London Stock Exchange)YesCommon SharesGBEURApr 2018
SPOTNYSE (New York Stock Exchange)YesCommon SharesUSUSDApr 2018
639DB (Deutsche Boerse AG)YesCommon SharesDEEURApr 2018
639XTRA (XETRA Trading Platform)YesCommon SharesDEEURApr 2018
SPOT NBMV (Bolsa Mexicana de Valores)YesCommon SharesMXMXNApr 2018
S1PO34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH 4 REPR 1 COMBRBRLJan 2020

Biography

Spotify Technology S.A., together with its subsidiaries, provides music streaming services worldwide. It operates through two segments, Premium and Ad-Supported. The Premium segment offers commercial-free music services to subscribers comprising unlimited online and offline high-quality streaming access to its catalog. The Ad-Supported segment provides ad-supported users with limited on-demand online access to its catalog. As of December 31, 2018, the company’s platform included 207 million monthly active users and 96 million premium subscribers in approximately 78 countries and territories. Spotify Technology S.A. was founded in 2006 and is based in Luxembourg City, Luxembourg. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/17 23:01
End of Day Share Price2020/02/17 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.