Spotify Technology S.A. (SPOT Quick QuoteSPOT - Free Report) is set to report its fourth-quarter 2024 results on Feb. 4, before the bell.

See Zacks Earnings Calendar to stay ahead of market-making news.

The Zacks Consensus Estimate for earnings in the to-be-reported quarter stands at $1.92 per share, indicating 592.3% year-over-year growth. The consensus mark for revenues is pegged at $4.35 billion, indicating year-over-year growth of 10%.

Two estimates for the to-be-reported quarter moved down over the past 30 days versus one upward revision. Over the same period, the Zacks Consensus Estimate for fourth-quarter 2024 earnings has decreased by 3%.

SPOT’s earnings surprise history has not been impressive. Earnings lagged the Zacks Consensus Estimate in two of the four trailing quarters and surpassed twice, the average negative surprise being 74.4%.

Earnings Whispers

Our proven model doesn’t conclusively predict an earnings beat for Spotify this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Spotify has an Earnings ESP of -16.45% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Factors Shaping Upcoming Results

The growth of subscribers and monthly active users (MAU) is likely to have benefited the top line in the to-be-reported quarter, directly benefiting the bottom line as well.

The consensus estimate for total MAUs is pegged at 665.3 million, indicating year-over-year growth of 10.5%. The consensus estimate for total ad-supported MAUs stands at 420.2 million, indicating year-over-year growth of 11%. The consensus mark for premium subscribers stands at 260 billion, indicating year-over-year growth of 10%.

Price Dynamics

SPOT has rallied a massive 150% over the past year, 57% over the past six months and 20.4% in the past month. These price dynamics suggest that the stock is in a rally phase.

Conclusion

While SPOT’s current growth prospects appear robust, potential investors should consider waiting as the stock may undergo a correction, especially when it does not seem poised for an earnings beat. SPOT's long-term growth potential remains strong, making it a compelling stock to watch for the right investment opportunity.

Stocks That Warrant a Look

Here are a few stocks from the broader Business Services sector, which, according to our model, have the right combination of elements to beat on earnings this season.

Broadridge Financial Solutions, Inc. (BR Quick QuoteBR - Free Report) :The Zacks Consensus Estimate for the company’s fourth-quarter 2024 revenues is pegged at $1.5 billion, indicating 9.8% year-over-year growth. The consensus mark for earnings stands at $1.4, suggesting 51.1% growth from the year-ago reported quarter. Earnings have surpassed the Zacks Consensus Estimate in two of the trailing four quarters and met in the other two, with an average earnings surprise of 1.3%.

BR has an Earnings ESP of +7.72% and a Zacks Rank of 2 at present. The company is scheduled to post its fourth-quarter results on Jan. 31.

Coherent Corp. (COHR Quick QuoteCOHR - Free Report) : The Zacks Consensus Estimate for the company’s second-quarter fiscal 2025 revenues is pegged at $1.4 billion, indicating a year-over-year increase of 21.6%. For earnings, the consensus mark is pegged at 70 cents per share, suggesting 94.4% growth from that reported in the year-ago quarter. The company beat the Zacks Consensus Estimate in all the past four quarters, with an average surprise of 25.5%.

COHR has an Earnings ESP of +7.48% and a Zacks Rank #2 at present. The company is scheduled to declare its fourth-quarter results on Feb. 5.