NYSE:SPOT

Stock Analysis Report

Executive Summary

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

Rewards

Trading at 7.9% below its fair value

Earnings are forecast to grow 46.92% per year

Became profitable this year

Risk Analysis

Shareholders have been diluted in the past year



Snowflake Analysis

Excellent balance sheet with proven track record.


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: SPOT has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-0.6%

SPOT

-0.9%

US Entertainment

0.6%

US Market


1 Year Return

17.1%

SPOT

24.5%

US Entertainment

20.8%

US Market

Return vs Industry: SPOT underperformed the US Entertainment industry which returned 24.5% over the past year.

Return vs Market: SPOT underperformed the US Market which returned 20.8% over the past year.


Shareholder returns

SPOTIndustryMarket
7 Day-0.6%-0.9%0.6%
30 Day-1.0%1.6%2.5%
90 Day12.7%3.3%4.9%
1 Year17.1%17.1%25.5%24.5%23.5%20.8%
3 Yearn/a60.3%55.1%46.5%37.0%
5 Yearn/a102.7%90.1%64.6%46.5%

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?

7.9%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: SPOT ($147.2) is trading below our estimate of fair value ($159.76)

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


Price To Earnings Ratio

PE vs Industry: SPOT is poor value based on its PE Ratio (51.4x) compared to the Entertainment industry average (26x).

PE vs Market: SPOT is poor value based on its PE Ratio (51.4x) compared to the US market (18.6x).


Price to Earnings Growth Ratio

PEG Ratio: SPOT is poor value based on its PEG Ratio (1.1x)


Price to Book Ratio

PB vs Industry: SPOT is overvalued based on its PB Ratio (12.2x) compared to the US Entertainment industry average (2.7x).


Next Steps

Future Growth

How is Spotify Technology forecast to perform in the next 1 to 3 years based on estimates from 28 analysts?

46.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SPOT's forecast earnings growth (46.9% per year) is above the savings rate (1.7%).

Earnings vs Market: SPOT's earnings (46.9% per year) are forecast to grow faster than the US market (14.4% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: SPOT's revenue (19.4% per year) is forecast to grow faster than the US market (7.4% per year).

High Growth Revenue: SPOT's revenue (19.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: SPOT's Return on Equity is forecast to be low in 3 years time (4.1%).


Next Steps

Past Performance

How has Spotify Technology performed over the past 5 years?

28.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SPOT has high quality earnings.

Growing Profit Margin: SPOT became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: SPOT has become profitable over the past 5 years, growing earnings by 28.3% per year.

Accelerating Growth: SPOT has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: SPOT has become profitable in the last year, making it difficult to compare its past year earnings growth to the Entertainment industry (8.8%).


Return on Equity

High ROE: SPOT's Return on Equity (23.9%) is considered high.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Spotify Technology's financial position?


Financial Position Analysis

Short Term Liabilities: SPOT's short term assets (€2.0B) do not cover its short term liabilities (€2.5B).

Long Term Liabilities: SPOT's short term assets (€2.0B) exceed its long term liabilities (€638.0M).


Debt to Equity History and Analysis

Debt Level: SPOT is debt free.

Reducing Debt: SPOT had no debt 5 years ago.

Debt Coverage: SPOT has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: SPOT has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet

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

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


Next Steps

Dividend

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


Dividend Yield vs Market

companyn/amarketbottom25%1.4%markettop25%3.7%industryaverage1.2%forecastin3Years0%

Current dividend yield vs market & industry

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

High Dividend: Unable to evaluate SPOT'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 SPOT's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if SPOT'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 SPOT's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

What is the CEO of Spotify Technology's salary, the management and board of directors tenure and is there insider trading?

1.5yrs

Average management tenure


CEO

Daniel Ek (36yo)

0yrs

Tenure

€2,220

Compensation

Mr. Daniel Ek founded Spotify Limited in 2006 and serves as its Chief Executive Officer. Mr. Ek is Co-founder, Chief Executive Officer and Chairman of Spotify Technology S.A. Mr. Ek is responsible for guid ...


CEO Compensation Analysis

Compensation vs Market: Daniel's total compensation ($USD2.22K) is below average for companies of similar size in the US market ($USD10.94M).

Compensation vs Earnings: Daniel's compensation has been consistent with company performance over the past year.


Management Age and Tenure

1.5yrs

Average Tenure

50yo

Average Age

Experienced Management: SPOT's management team is not considered experienced ( 1.5 years average tenure), which suggests a new team.


Board Age and Tenure

2.5yrs

Average Tenure

51yo

Average Age

Experienced Board: SPOT's board of directors are not considered experienced ( 2.5 years average tenure), which suggests a new board.


Insider Trading

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 5.9%.


Management Team

  • Paul Vogel

    VP, Head of Finance/FP&A and Investor Relations

    • Tenure: 0yrs
  • Daniel Ek (36yo)

    Co-Founder

    • Tenure: 0yrs
    • Compensation: €2.22k
  • Barry McCarthy (65yo)

    Chief Financial Officer

    • Tenure: 0yrs
    • Compensation: €5.56m
  • Katarina Berg (51yo)

    Chief Human Resources Officer

    • Tenure: 0yrs
  • Gustav Söderström (42yo)

    Chief Research & Development Officer

    • Tenure: 0yrs
    • Compensation: €5.42m
  • Martin Lorentzon Sven (50yo)

    Co-Founder & Director

    • Tenure: 11.4yrs
    • Compensation: €299.97k
  • Alex Norström (42yo)

    Chief Premium Business Officer

    • Tenure: 0yrs
    • Compensation: €4.94m
  • Dawn Ostroff (58yo)

    Chief Content Officer

    • Tenure: 1.5yrs
    • Compensation: €7.93m
  • Horacio Gutierrez

    General Counsel

    • Tenure: 0yrs
  • Paul Sawyer

    Controller & Chief Accounting Officer

    • Tenure: 0.3yrs

Board Members

  • Woody Marshall (51yo)

    Independent Director

    • Tenure: 4.5yrs
    • Compensation: €299.97k
  • Tom Staggs (58yo)

    Independent Director

    • Tenure: 2.5yrs
    • Compensation: €319.99k
  • Shishir Mehrotra (40yo)

    Director

    • Tenure: 2.5yrs
    • Compensation: €299.97k
  • Padmasree Warrior (58yo)

    Independent Director

    • Tenure: 2.5yrs
    • Compensation: €299.97k
  • Cristina Stenbeck (42yo)

    Director

    • Tenure: 2.5yrs
    • Compensation: €299.97k
  • Ted Sarandos (54yo)

    Director

    • Tenure: 3.3yrs
    • Compensation: €299.97k
  • Heidi O'Neill (53yo)

    Director

    • Tenure: 2yrs
    • Compensation: €299.97k
  • Daniel Ek (36yo)

    Co-Founder

    • Tenure: 0yrs
    • Compensation: €2.22k
  • Martin Lorentzon Sven (50yo)

    Co-Founder & Director

    • Tenure: 11.4yrs
    • Compensation: €299.97k

Company Information

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


Key Information

  • Name: Spotify Technology S.A.
  • Ticker: SPOT
  • Exchange: NYSE
  • Founded: 2006
  • Industry: Movies and Entertainment
  • Sector: Media
  • Market Cap: US$27.044b
  • Shares outstanding: 183.72m
  • 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

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  ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/14 02:07
End of Day Share Price2019/12/13 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


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.