Nucor earnings beat by $0.08, revenue fell short of estimates
Pivotal Research raised its price target on Spotify (NYSE:SPOT) to $900 from $800 on Monday, while maintaining a Buy rating on the music streaming service. The streaming giant, currently trading at $715.57 and near its 52-week high of $723.70, has delivered an impressive 129.92% return over the past year. The firm cited a shift to a year-end 2026 target price timeframe, an updated valuation of Spotify’s Tencent (HK:0700) Music stake, and favorable currency movements as key factors behind the increase.
The research firm believes Spotify has "won the global audio streaming wars" through its user interface and recommendation engine, noting that audio streaming remains underpenetrated globally. This market position allows Spotify to increase prices while still generating solid subscriber growth, according to Pivotal’s analysis. With revenue growing at 17.24% and a market capitalization of $146.73 billion, InvestingPro analysis indicates the company is currently trading above its Fair Value, reflecting high investor expectations.
Pivotal projects Spotify will leverage its approximately 700 million monthly active users—eventually growing to 1 billion—to add complementary services including long-form video content, social media enhancements, and in-app purchases. The firm also sees potential for improved advertising monetization through AI and possible expansion into live programming such as sports.
The research firm forecasts a five-year EBITDA compound annual growth rate of 60% for Spotify, along with continued growth in free cash flow. Pivotal also highlighted that Spotify remains "a very attractively priced entertainment alternative" in a potentially weakening global economic environment. Trading at a P/E ratio of 107.27, the company’s valuation reflects its strong market position and growth prospects. For deeper insights into Spotify’s financial health and growth metrics, including 18 additional ProTips, check out the comprehensive analysis available on InvestingPro.
Pivotal’s valuation is based on a discounted cash flow methodology using a terminal 2030 EBITDA multiple of 16x and an 8% discount rate. At the new $900 target price, Spotify would trade at an enterprise value of approximately $175 billion, which Pivotal considers "reasonable for the dominant premium audio platform in the world."
In other recent news, Spotify Technology S.A. has been in the spotlight with several key developments. Jefferies analysts have raised their price target for Spotify to $845, citing potential revenue and EBITDA growth driven by factors such as improved advertising monetization and the introduction of a new superfans tier. Similarly, JPMorgan has increased its price target for the company to $730, highlighting Spotify’s expanding user base and positive cash flow. Bernstein SocGen Group also maintains an Outperform rating, with a price target of $825, reflecting confidence in Spotify’s growth potential.
In a separate development, the Stockholm Court of Appeal has ruled that Spotify violated the EU’s General Data Protection Regulation. The court found that Spotify failed to provide clear information about data handling and storage periods, as well as adequate safeguards for data transfers. This ruling follows an inspection by the Swedish Data Protection Authority. The specific implications of this ruling for Spotify have not been disclosed. These recent developments indicate a period of both opportunity and challenge for the company.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.