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SPOT

Spotify Technology NYSE:SPOT Stock Report

Last Price

US$109.07

Market Cap

US$21.0b

7D

7.9%

1Y

-53.4%

Updated

24 May, 2022

Data

Company Financials +
SPOT fundamental analysis
Snowflake Score
Valuation2/6
Future Growth4/6
Past Performance3/6
Financial Health5/6
Dividends0/6

SPOT Stock Overview

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

Rewards

Trading at 68.2% below our estimate of its fair value

Earnings are forecast to grow 65.89% per year

Became profitable this year

Risk Analysis

No risks detected for SPOT from our risk checks.

Spotify Technology Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Spotify Technology
Historical stock prices
Current Share PriceUS$109.07
52 Week HighUS$305.60
52 Week LowUS$89.03
Beta1.8
1 Month Change-1.03%
3 Month Change-26.99%
1 Year Change-53.40%
3 Year Change-12.50%
5 Year Changen/a
Change since IPO-26.80%

Recent News & Updates

May 23

Spotify Has Crashed 70%: The Simple Bullish Thesis

Spotify stock is now down 70% from all-time highs. The company continues to grow its user base at a rapid clip. Ad-supported MAUs continue to far outnumber premium subscribers. The greater opportunity is pricing power due to the high operating leverage inherent in the business model. The stock is trading at only 34x earnings assuming a 25% price increase.

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

SPOTUS EntertainmentUS Market
7D7.9%2.4%-0.5%
1Y-53.4%-47.7%-12.3%

Return vs Industry: SPOT underperformed the US Entertainment industry which returned -47.6% over the past year.

Return vs Market: SPOT underperformed the US Market which returned -12.9% over the past year.

Price Volatility

Is SPOT's price volatile compared to industry and market?
SPOT volatility
SPOT Average Weekly Movement10.3%
Entertainment Industry Average Movement12.6%
Market Average Movement7.8%
10% most volatile stocks in US Market16.9%
10% least volatile stocks in US Market2.9%

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

FoundedEmployeesCEOWebsite
20066,617Daniel Ekhttps://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€19.69b
Earnings (TTM)€74.00m
Revenue (TTM)€10.18b

266.0x

P/E Ratio

1.9x

P/S Ratio

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 Margin26.65%
Net Profit Margin0.73%
Debt/Equity Ratio53.4%

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 ($109.07) is trading below our estimate of fair value ($343.19)

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 (266x) compared to the US Entertainment industry average (28.6x).

PE vs Market: SPOT is poor value based on its PE Ratio (266x) compared to the US market (15.1x).


Price to Earnings Growth Ratio

PEG Ratio: SPOT is poor value based on its PEG Ratio (4x)


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


65.9%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SPOT's forecast earnings growth (65.9% per year) is above the savings rate (1.9%).

Earnings vs Market: SPOT's earnings (65.9% per year) are forecast to grow faster than the US market (12.5% per year).

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

Revenue vs Market: SPOT's revenue (12.9% per year) is forecast to grow faster than the US market (7.8% per year).

High Growth Revenue: SPOT's revenue (12.9% 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 (3.7%).


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.


Discover strong dividend paying companies

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 ($USD98.55K) is below average for companies of similar size in the US market ($USD13.34M).

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.


Top Shareholders

Company Information

Spotify Technology S.A.'s 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
  • Implied Market Cap: US$21.038b
  • Shares outstanding: 192.88m
  • Website: https://www.spotify.com

Number of Employees


Location

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

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/05/24 00:00
End of Day Share Price2022/05/23 00:00
Earnings2022/03/31
Annual Earnings2021/12/31


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.