Spotify (SPOT): Assessing Valuation After CEO Daniel Ek Announces 2026 Leadership Transition

Spotify (SPOT) just announced that founder Daniel Ek will move from CEO to executive chairman starting January 1, 2026, handing daily leadership to Gustav Söderström and Alex Norström as co-CEOs. This move formalizes how Spotify has actually been managed since 2023 and sets the stage for the company’s next chapter.

See our latest analysis for Spotify Technology.

Spotify’s announcement comes at a time when the stock’s momentum has cooled, despite positive operational milestones and a budding reputation for innovation. After a rollercoaster year that featured leadership updates and product enhancements, Spotify’s 1-year total shareholder return sits just under 1%, signaling investor caution even as the company pushes ahead with growth initiatives and premium pricing strategies.

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Yet with analysts divided and the share price hovering just below recent targets, investors are left asking whether Spotify is undervalued after its leadership shakeup or if all the upside is already priced in.

Most Popular Narrative: Fairly Valued

Spotify’s share price of $707.30 is almost identical to the most widely followed narrative’s fair value target of $703. This suggests a finely balanced outlook between growth and current momentum. This brings extra attention to what underpins the narrative’s optimism and how the story skews for future gains.

"Spotify reported a gross margin of 31.5% in Q2, up from 27% a year ago and in line with the 32.2% reported in Q4. This suggests Spotify is steadily executing on gross margin expansion, despite currency volatility and content mix shifts."

Read the complete narrative.

Why do some investors think Spotify’s cash flow transformation could flip the valuation story on its head? There is a bold call on margin expansion, aggressive user targets, and a striking profit trajectory embedded in this narrative. Curious to see what projections support such an ambitious fair value?

Result: Fair Value of $703 (ABOUT RIGHT)

Have a read of the narrative in full and understand what's behind the forecasts.

However, continued underperformance in Spotify’s advertising business or slower than expected growth in emerging markets could challenge the optimism embedded in these projections.

Find out about the key risks to this Spotify Technology narrative.

Build Your Own Spotify Technology Narrative

If this perspective does not align with your own, or you prefer diving into the data firsthand, you can craft a unique Spotify thesis in just a few minutes, and Do it your way.

A good starting point is our analysis highlighting 2 key rewards investors are optimistic about regarding Spotify Technology.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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