Spotify Technology (NYSE:SPOT) - Share price, News & Analysis

SPOT fundamental analysis
Snowflake Score
Valuation	2/6
Future Growth	4/6
Past Performance	3/6
Financial Health	5/6
Dividends	0/6

SPOT Stock Overview

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

Rewards

Trading at 67.9% below our estimate of its fair value

Earnings are forecast to grow 65.28% per year

Became profitable this year

Risk Analysis

No risks detected for SPOT from our risk checks.

Spotify Technology Competitors

Netflix

NasdaqGS:NFLX

US$83.4b

Lions Gate Entertainment

NYSE:LGF.A

US$2.5b

Anghami

NasdaqGM:ANGH

US$232.5m

LiveOne

NasdaqCM:LVO

US$49.3m

Price History & Performance

Summary of all time highs, changes and price drops for Spotify Technology
Historical stock prices
Current Share Price	US$106.09
52 Week High	US$305.60
52 Week Low	US$89.03
Beta	1.8
1 Month Change	-22.15%
3 Month Change	-34.60%
1 Year Change	-52.55%
3 Year Change	-20.09%
5 Year Change	n/a
Change since IPO	-28.80%

Recent News & Updates

May 04

Spotify: Top Subscription Stock With A Sell Recommendation

High inflation, a slowing economy, competition, and investor fear are affecting subscriber growth numbers and eating into the profits of popular tech and subscription stocks. Pandemic darlings are becoming duds and their stocks are falling to major lows. With market volatility, many companies do not possess the fundamentals to endure this climate. Using the Seeking Alpha Quant System, you can see why the highlighted stock is a strong sell.

Apr 21

Spotify: Not A Sell, But Still Far From A Buy

Spotify is about to lose the Obamas on its exclusive podcast partnership. We discuss why Spotify doesn't have a defensible moat, coupled with weak profitability. Competition is also brewing. While we don't think SPOT stock is a sell now, we rate it as a Hold.

Apr 04

Spotify: Neither Disruptive Nor Innovative; Ripe To Be Disrupted; Sell Now

While Spotify built up an impressive music business, we recommend investors sell their shares as growth is beginning to slow amidst rising interest rates and turmoil in Western Europe. We believe Spotify's business will be under severe strain due to slowing subscriber growth, increasing churn, limited differentiation, and increasing competition. Competition from Apple, Amazon, and Google will continue to intensify as these large vendors will bundle their products and services, making it hard for Spotify to compete. The era of easy-subscriber growth is over, and the company would need to invest heavily to keep the growth going. We expect Spotify to produce its content to remain relevant. Spotify stock is not cheap and is priced for perfection. We can foresee the stock below $100 this year. Therefore, we recommend that investors sell the shares.

Shareholder Returns

	SPOT	US Entertainment	US Market
7D	1.3%	0.7%	-2.5%
1Y	-52.6%	-46.2%	-10.4%

Return vs Industry: SPOT underperformed the US Entertainment industry which returned -46.2% over the past year.

Return vs Market: SPOT underperformed the US Market which returned -10.4% over the past year.

Price Volatility

Is SPOT's price volatile compared to industry and market?
SPOT volatility
SPOT Average Weekly Movement	10.3%
Entertainment Industry Average Movement	12.5%
Market Average Movement	7.8%
10% most volatile stocks in US Market	16.7%
10% least volatile stocks in US Market	2.8%

Stable Share Price: SPOT is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 10% a week.

Volatility Over Time: SPOT's weekly volatility (10%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2006	6,617	Daniel Ek	https://www.spotify.com

Spotify Technology S.A., together with its subsidiaries, provides audio streaming services worldwide. It operates through Premium and Ad-Supported segments. The Premium segment offers unlimited online and offline streaming access to its catalog of music and podcasts without commercial breaks to its subscribers.

Spotify Technology Fundamentals Summary

How do Spotify Technology's earnings and revenue compare to its market cap?
SPOT fundamental statistics
Market Cap	€19.66b
Earnings (TTM)	€74.00m
Revenue (TTM)	€10.18b

265.7x

P/E Ratio

1.9x

P/S Ratio

Is SPOT overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
SPOT income statement (TTM)
Revenue	€10.18b
Cost of Revenue	€7.47b
Gross Profit	€2.71b
Other Expenses	€2.64b
Earnings	€74.00m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	0.38
Gross Margin	26.65%
Net Profit Margin	0.73%
Debt/Equity Ratio	53.4%

How did SPOT perform over the long term?

See historical performance and comparison

Valuation

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

Valuation Score

2/6

Valuation Score 2/6

Below Fair Value
Significantly Below Fair Value
PE vs Industry
PE vs Market
PEG Ratio
PB vs Industry

>50%

Undervalued compared to fair value

Share Price vs. Fair Value

Below Fair Value: SPOT ($106.09) is trading below our estimate of fair value ($330.35)

Significantly Below Fair Value: SPOT is trading below fair value by more than 20%.

Price To Earnings Ratio

PE vs Industry: SPOT is poor value based on its PE Ratio (265.7x) compared to the US Entertainment industry average (23.1x).

PE vs Market: SPOT is poor value based on its PE Ratio (265.7x) compared to the US market (15.5x).

Price to Earnings Growth Ratio

PEG Ratio: SPOT is poor value based on its PEG Ratio (4.1x)

Price to Book Ratio

PB vs Industry: SPOT is overvalued based on its PB Ratio (9.2x) compared to the US Entertainment industry average (1.9x).

Future Growth

How is Spotify Technology forecast to perform in the next 1 to 3 years based on estimates from 25 analysts?

Future Growth Score

4/6

Future Growth Score 4/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

65.3%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: SPOT's forecast earnings growth (65.3% per year) is above the savings rate (1.9%).

Earnings vs Market: SPOT's earnings (65.3% per year) are forecast to grow faster than the US market (12.6% per year).

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

Revenue vs Market: SPOT's revenue (13% per year) is forecast to grow faster than the US market (8% per year).

High Growth Revenue: SPOT's revenue (13% 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 (8.3%).

Past Performance

How has Spotify Technology performed over the past 5 years?

Past Performance Score

3/6

Past Performance Score 3/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

44.6%

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 44.6% 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 (23.3%).

Return on Equity

High ROE: SPOT's Return on Equity (3.4%) is considered low.

Financial Health

How is Spotify Technology's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: SPOT's short term assets (€4.4B) exceed its short term liabilities (€3.1B).

Long Term Liabilities: SPOT's short term assets (€4.4B) exceed its long term liabilities (€1.8B).

Debt to Equity History and Analysis

Debt Level: SPOT has more cash than its total debt.

Reducing Debt: SPOT had negative shareholder equity 5 years ago, but is now positive and has therefore improved.

Debt Coverage: SPOT's debt is well covered by operating cash flow (29.1%).

Interest Coverage: SPOT's interest payments on its debt are not well covered by EBIT (1.9x coverage).

Balance Sheet

Dividend

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

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

Dividend Yield vs Market

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

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

Earnings Payout to Shareholders

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

Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as SPOT has not reported any payouts.

Next Steps

Explore strong dividend paying companies in the Media industry.

Management

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

3.6yrs

Average management tenure

CEO

Daniel Ek (38 yo)

16.33yrs

Tenure

€92,225

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 ($USD96.00K) is below average for companies of similar size in the US market ($USD13.26M).

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

Leadership Team

Experienced Management: SPOT's management team is considered experienced (3.6 years average tenure).

Board Members

Experienced Board: SPOT's board of directors are considered experienced (4.9 years average tenure).

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 not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/05/15 00:00
End of Day Share Price	2022/05/13 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31