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Spotify (SPOT) Rises Yet Lags Behind Market: Some Facts Worth Knowing

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The latest trading session saw Spotify (SPOT - Free Report) ending at $487.51, denoting a +0.41% adjustment from its last day's close. This move lagged the S&P 500's daily gain of 0.88%. Elsewhere, the Dow gained 1.24%, while the tech-heavy Nasdaq added 0.65%.

Heading into today, shares of the music-streaming service operator had gained 6.41% over the past month, outpacing the Business Services sector's gain of 0.03% and the S&P 500's gain of 1.17% in that time.

Investors will be eagerly watching for the performance of Spotify in its upcoming earnings disclosure. The company's earnings report is set to be unveiled on February 4, 2025. On that day, Spotify is projected to report earnings of $1.91 per share, which would represent year-over-year growth of 589.74%. Meanwhile, the latest consensus estimate predicts the revenue to be $4.36 billion, indicating a 10.39% increase compared to the same quarter of the previous year.

Investors should also take note of any recent adjustments to analyst estimates for Spotify. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.7% lower. Spotify is currently sporting a Zacks Rank of #3 (Hold).

Looking at its valuation, Spotify is holding a Forward P/E ratio of 55.07. This indicates a premium in contrast to its industry's Forward P/E of 23.37.

The Technology Services industry is part of the Business Services sector. This industry, currently bearing a Zacks Industry Rank of 65, finds itself in the top 26% echelons of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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