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On Wednesday, Cantor Fitzgerald analyst Deepak Mathivanan increased the price target for Spotify (NYSE:SPOT) shares to $610 from the previous $520, maintaining a Neutral rating on the stock. The streaming giant, currently valued at $118.1 billion, has demonstrated remarkable momentum with a 105.73% return over the past year. According to InvestingPro analysis, the company maintains a "GREAT" financial health score of 3.2 out of 5. This adjustment follows the company’s first-quarter results, which revealed that while Spotify’s revenue and gross profit aligned with expectations, its operating income was slightly below, by approximately 2%, according to consensus data from Visible Alpha. This shortfall was attributed to around €60 million in additional social costs. InvestingPro data shows the company’s strong financial position, with revenue growing at 17.24% and maintaining a healthy current ratio of 1.48.
The music streaming giant reported meeting its guidance for monthly active users (MAUs) and slightly surpassing expectations for premium subscribers. However, Spotify’s second-quarter revenue forecast of €4.3 billion, indicating a year-over-year increase of 12%, was marginally below the prior estimates by 2%, influenced partly by recent foreign exchange trends. The company also provided guidance for the second quarter’s gross margin and operating income at 31.5% and €539 million, respectively, compared to the previous Street estimates of 31.4% and €545 million.
Spotify continues to project an expansion in gross margin for the full year of 2025 while anticipating some quarter-over-quarter variability. Despite a challenging macroeconomic environment, Mathivanan noted that Spotify’s business remains strong. On Wednesday, Spotify shares fell by 3% in contrast to the Nasdaq, which saw a slight increase of 0.5%. The analyst suggested that Spotify’s defensive characteristics and resilience during economic downturns could appeal to investors in the short term. For deeper insights into Spotify’s valuation and growth prospects, investors can access comprehensive analysis and 17 additional ProTips through InvestingPro’s detailed research reports.
In other recent news, Spotify Technology SA has been the subject of multiple analyst evaluations, highlighting various aspects of its financial outlook and market position. Spotify’s first-quarter earnings report for 2025, as noted by Raymond (NSE:RYMD) James, showed mixed results with revenue slightly below expectations, yet gross margins remained strong. Raymond James adjusted its price target to $635, maintaining an Outperform rating, emphasizing Spotify’s strategic advancements in content areas like audiobooks and video podcasting. Meanwhile, JPMorgan raised its price target for Spotify to $670, citing expected improvements in gross and operating margins by 2025, despite slight reductions in revenue and free cash flow estimates due to foreign exchange challenges.
Benchmark also adjusted its price target to $700, maintaining a Buy rating, and highlighted potential revenue drivers such as a new premium subscription tier and increased podcast profitability. Morgan Stanley (NYSE:MS) reiterated its $670 price target, maintaining an Overweight rating and noting Spotify’s competitive edge through technology-driven personalization. They foresee significant growth opportunities in advertising and AI applications. Conversely, Cantor Fitzgerald reduced its price target to $520, keeping a Neutral rating, due to anticipated challenges from foreign exchange impacts on revenue and EBIT. Despite these adjustments, analysts generally express confidence in Spotify’s strategic initiatives and market position.
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