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On Wednesday, Barclays (LON:BARC) analyst Kannan Venkateshwar increased the price target for Spotify (NYSE:SPOT) shares to $710 from the previous $475, maintaining an Overweight rating on the stock. According to InvestingPro data, Spotify boasts a "GREAT" financial health score of 3.23 out of 5, though current analysis suggests the stock may be trading above its Fair Value. The adjustment reflects a positive outlook on the company’s future, as Venkateshwar believes Spotify’s recent quarterly performance and guidance will support the narrative for consistent growth throughout the year.
Spotify, now commanding a market capitalization of $125.65 billion and generating over $16.2 billion in revenue with an 18.31% growth rate, is expected to benefit from several key developments. These include the introduction of video podcasts and the expansion of programmatic ad auctions, which are anticipated to enhance the company’s advertising trajectory. Additionally, the launch of a new premium tier targeted at "super fan" audiences and potential price increases in select markets that have not seen changes since 2023 are projected to contribute to revenue growth. InvestingPro subscribers have access to over 20 additional insights about Spotify’s growth potential and financial health.
Venkateshwar also highlighted the potential for marketplace revenues to accelerate, especially if the super fan tier includes non-streaming and non-music services. Although specifics are yet to be disclosed, this new offering could represent a significant growth opportunity for Spotify.
The company has set a goal to increase Monthly Active Users (MAUs) by at least 60 million, a figure that is already factored into consensus estimates. However, Venkateshwar notes that there may be further upside potential due to structural shifts in emerging markets such as India, where competitors are exiting the market.
Despite concerns about revenue growth deceleration in 2025, Venkateshwar’s analysis suggests that any slowdown may not be significant when compared to the strong 18% revenue growth witnessed in 2024. The market appears to share this optimism, with Spotify’s stock delivering an impressive 178.51% return over the past year and trading near its 52-week high. This outlook provides a basis for the increased price target and the continued Overweight rating on Spotify’s stock. For a deeper understanding of Spotify’s valuation and growth metrics, consider exploring the comprehensive Pro Research Report available on InvestingPro.
In other recent news, Spotify Technology SA has seen a series of positive revisions in its stock price targets from multiple financial firms. Raymond (NSE:RYMD) James lifted the company’s price target to $650 from $500, citing robust quarterly results and a promising outlook. Similarly, Canaccord Genuity analysts increased Spotify’s price target to $650, attributing the decision to anticipated strong fourth-quarter results. KeyBanc Capital Markets also raised its price target for Spotify to $600, reflecting optimism about the company’s growth prospects. Meanwhile, Citi increased its price target on Spotify shares to $540, ahead of the company’s fourth-quarter 2024 earnings report.
In other developments, Spotify recently won a lawsuit filed by the Mechanical Licensing Collective, which had alleged the company shortchanged songwriters of their royalties. This legal victory allows Spotify to continue its operations without the potential hindrance of this lawsuit.
These revisions and legal developments are part of the recent news surrounding Spotify. Investors are likely to pay close attention to the company’s forthcoming financial results and strategic insights, which will provide a clearer picture of its trajectory in the competitive landscape of music streaming.
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