Spotify stock price target raised to $675 from $640 at Cantor Fitzgerald

Investing.com - Cantor Fitzgerald raised its price target on Spotify (NYSE:SPOT) to $675.00 from $640.00 on Wednesday, while maintaining a Neutral rating on the music streaming company’s stock. Currently trading at $641, Spotify’s stock has delivered an impressive 64.55% return over the past year, significantly outperforming many peers in the entertainment industry. According to InvestingPro data, analyst targets for the stock range from $489.77 to $899.59, reflecting mixed opinions on the company’s valuation.

The price target adjustment follows Spotify’s third-quarter results, which exceeded Street estimates with revenue outperforming by 1% and operating income beating expectations by 16% (or 13% excluding social charges). The company reported a total gross margin of 31.6%, which was 50 basis points ahead of prior guidance, primarily due to changes in rights holder accruals following recent deals. This performance aligns with Spotify’s overall gross profit margin of 31.85% for the last twelve months, showing consistent improvement in profitability metrics.

For the fourth quarter, Spotify provided revenue guidance of EUR 4.5 billion (13% ex-FX), slightly below the prior Street estimate of EUR 4.6 billion (14% ex-FX). The company expects gross margin to reach 31.9% for Q4, implying a 70 basis points year-over-year expansion, compared to the 230 basis points average seen in the first three quarters. Spotify has maintained solid revenue growth at 11.89% over the last twelve months, with annual revenue reaching approximately $19.8 billion.

Cantor Fitzgerald noted that Spotify continues to see good traction on podcasts and audiobooks in many geographic markets, while also integrating AI capabilities across several areas of the user experience. The firm believes Spotify has "plenty of runway" to increase prices in several markets, which should help gross margin and EBIT margin expansion over the next 2-3 years. InvestingPro analysis shows Spotify has a "GREAT" overall financial health score of 3.09, with particularly strong metrics in growth (3.86) and profit (3.63).

The firm lowered its FY26E revenue estimates for Spotify by 1% but raised EBIT expectations by 7%, with the new price target based on a blended average of 35x FY26E/27E EBIT, compared to the previous target of $640 based on 40x FY26E. With a current P/E ratio of 80.83 and diluted EPS of $6.71, Spotify is trading at premium multiples relative to its peers. InvestingPro identifies several key insights about Spotify, including its strong cash position and high valuation multiples. Investors seeking deeper analysis can access the comprehensive Pro Research Report available for Spotify, one of 1,400+ US equities covered in detail on the platform.

In other recent news, Spotify’s third-quarter 2025 earnings have prompted various analyst reactions. The company reported results that generally aligned with expectations, with some positive variances in ad-based users and gross margins. Rosenblatt responded by lowering its price target to $670, citing delayed ad growth, while maintaining a Neutral rating. Guggenheim also adjusted its price target to $800 from $850, maintaining a Buy rating but noting Spotify’s fourth-quarter premium subscriber guidance fell short of their projections. BofA Securities raised its price target slightly to $190, emphasizing that Spotify met key growth and margin metrics, yet described the stock as "priced to perfection." Bernstein reiterated an Outperform rating with a price target of $830, reflecting optimism despite market volatility. Meanwhile, Goldman Sachs lowered its price target to $735, acknowledging mixed results but highlighting strong user engagement. These developments underscore varying analyst perspectives on Spotify’s recent financial performance and future outlook.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.