Wang & Lee Group board approves 250-to-1 reverse share split
On Friday, KeyBanc Capital Markets updated its outlook for Spotify Technology SA (NYSE:SPOT), increasing its price target on the company’s shares from $555.00 to $600.00, while maintaining an Overweight rating. The adjustment comes in anticipation of Spotify’s fourth-quarter results, which are expected to demonstrate continued momentum in subscriber growth, revenue, and margins. The optimism appears well-founded, as InvestingPro data shows Spotify has achieved impressive growth with revenue increasing 18.5% over the last twelve months and the stock delivering a remarkable 155% return over the past year.
KeyBanc analysts predict the upcoming earnings report will reflect Spotify’s sustained progress, reinforcing the company’s status as a leading player in the market. The early renewal of the licensing agreement with Universal Music Group (AS:UMG) also appears to be a positive indicator for Spotify’s future. According to KeyBanc, this development suggests that Spotify’s innovations in products and plans could propel revenue growth closer to its ambitious target of over 20%, a figure that has met with some skepticism on Wall Street. InvestingPro analysis reveals strong financial health with a current ratio of 1.71 and more cash than debt on its balance sheet, suggesting the company is well-positioned to invest in growth initiatives.
The firm remains confident in Spotify’s position as a fundamental investment, citing the company’s market and product leadership, which provides the potential for increased pricing power, significant revenue growth, and margin expansion. The possibility of stock buybacks further supports KeyBanc’s optimistic stance on Spotify’s financial prospects.
KeyBanc’s valuation models for Spotify, including estimated enterprise value to sales (EV/S) and enterprise value to free cash flow (EV/FCF) for the year 2026, stand at 5.4 times and 34.5 times, respectively. These metrics underpin the firm’s raised price target as they continue to endorse Spotify with an Overweight rating, reflecting a bullish outlook on the stock’s performance.
In other recent news, Spotify Technology SA has seen a flurry of analyst activity and significant legal developments. Citi analysts raised their price target for Spotify to $540 from $500, maintaining a neutral rating. This adjustment comes in anticipation of the company’s fourth-quarter 2024 earnings report, with a focus on Spotify’s capital allocation strategies, potential product enhancements, and the implications of its new agreement with Universal Music.
Meanwhile, Erste Group initiated coverage on Spotify with a Buy rating, citing the company’s strong revenue growth and significant reduction in operating costs. Conversely, Cantor Fitzgerald maintained a Neutral rating for Spotify but reduced the stock price target to $480. Wolfe Research downgraded Spotify shares from Outperform to Peer Perform due to concerns about the company’s potential for margin growth.
In legal news, Spotify successfully dismissed a lawsuit filed by the Mechanical Licensing Collective, which had alleged manipulation of royalty payments to songwriters. This legal victory allows Spotify to continue operations without the threat of this litigation.
In terms of earnings, Spotify is set to announce its fourth-quarter 2024 results soon, with Cantor Fitzgerald anticipating a strong performance. Looking forward to the first quarter of 2025, analysts predict a modest compression in gross margins due to investments in video podcasts, but strong net additions are expected to continue. These are recent developments in Spotify’s ongoing narrative.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.