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Investing.com - Rosenblatt has reduced its price target on Spotify (NYSE:SPOT) to $670 from $700 while maintaining a Neutral rating on the music streaming company. Currently trading at $629.60, Spotify has delivered impressive returns with a 64.55% gain over the past year, though InvestingPro analysis suggests the stock is trading above its Fair Value.
The adjustment follows Spotify’s third quarter 2025 results, which showed positive variances relative to guidance in ad-based users and gross margins, according to Rosenblatt’s analysis. The company reported a gross profit margin of 31.85% for the last twelve months, with revenue reaching $19.84 billion, representing 11.89% year-over-year growth.
Despite these positive elements, Spotify’s fourth quarter 2025 guidance came in slightly below Rosenblatt’s previous models, primarily due to lower projected advertising revenues.
Rosenblatt noted that Spotify’s advertising sales are expected to accelerate in the second half of 2026, which is later than the firm had anticipated, prompting the downward revision in the price target.
The new $670 price target represents an enterprise value of 35 times Spotify’s estimated 2026 adjusted EBITDA, supported by an estimated 29% EBITDA compound annual growth rate from 2025 to 2027. Currently, Spotify trades at an EV/EBITDA multiple of 49.96x based on its last twelve months EBITDA of $2.42 billion. Discover comprehensive valuation metrics and 16+ ProTips in the detailed Pro Research Report available on InvestingPro.
In other recent news, Spotify reported third-quarter results that largely aligned with expectations, with its core gross margin slightly exceeding projections. The company provided guidance for the addition of 8 million premium subscribers in the fourth quarter, which fell short of Guggenheim’s projection of 9 million. Following these results, Guggenheim lowered its price target for Spotify to $800, maintaining a Buy rating. Meanwhile, Bernstein reiterated its Outperform rating with a price target of $830, reflecting confidence in Spotify’s ongoing performance.
BofA Securities also raised its price target for Spotify from $185 to $190, maintaining a Buy rating and noting that the company delivered on key growth and margin metrics. However, Goldman Sachs reduced its price target to $735, citing mixed third-quarter results while highlighting strong user engagement as a positive factor. Spotify’s second-quarter 2025 earnings showed a 15% year-over-year increase in total revenue, reaching €4.2 billion, alongside advancements in AI capabilities and product offerings. These developments indicate a mixed but generally positive outlook among analysts for Spotify’s future performance.
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