Cigna earnings beat by $0.04, revenue topped estimates
Investing.com - Benchmark lowered its price target on Spotify (NYSE:SPOT) to $800 from $840 while maintaining a Buy rating on Wednesday. The stock, currently trading at $635.67, has experienced an 8% decline over the past week, according to InvestingPro data.
The research firm attributed the stock’s weakness to implied weak Average Revenue Per User (ARPU) guidance and advertising results in Spotify’s latest report.
Benchmark noted that the implied flat year-over-year third-quarter FX neutral premium ARPU guidance primarily stems from pricing comparisons that will be lapped in the fourth quarter, as well as quarter-to-quarter geographical and product variances.
The firm’s analysis indicates third-quarter gross margin was guided 40 basis points below consensus, aligning with their 31.1% estimate, which largely reflected a once-a-year sequential regional regulatory charge.
Benchmark expects gross margin trends to remain stable in the second half of the year, maintaining its 2025 estimate at 31.8% unchanged.
In other recent news, Spotify reported its second-quarter earnings, revealing that total revenues and operating income fell below analyst expectations by 2% and 16%, respectively. This shortfall was attributed mainly to foreign exchange headwinds and social charges. Despite these challenges, Spotify exceeded expectations in subscriber growth, adding 8 million new subscribers and bringing its total to 276 million, while monthly active users rose by 18 million to 696 million. Rosenblatt responded by lowering its price target for Spotify to $679, citing concerns over average revenue per user.
Guggenheim also reduced its price target to $800, maintaining a Buy rating due to foreign exchange headwinds impacting revenue outlook. In contrast, Oppenheimer upgraded Spotify to Outperform, setting a price target of $800, citing growth drivers such as potential free tier monetization and benefits from App Store changes. KeyBanc raised its price target to $860, maintaining an Overweight rating and acknowledging potential variability in upcoming results due to foreign exchange rates and other factors. These developments reflect a mix of cautious optimism and concern among analysts regarding Spotify’s financial performance and growth prospects.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.