Spotify (SPOT) ended the recent trading session at $476.91, demonstrating a +1.13% swing from the preceding day’s closing price. This change outpaced the S&P 500’s 0.82% gain on the day. Meanwhile, the Dow lost 0.22%, and the Nasdaq, a tech-heavy index, added 1.77%.
Heading into today, shares of the music-streaming service operator had gained 12.44% over the past month, outpacing the Business Services sector’s gain of 2.43% and the S&P 500’s gain of 0.8% in that time.
Market participants will be closely following the financial results of Spotify in its upcoming release. It is anticipated that the company will report an EPS of $2.01, marking a 615.38% rise compared to the same quarter of the previous year. At the same time, our most recent consensus estimate is projecting a revenue of $4.4 billion, reflecting a 11.24% rise from the equivalent quarter last year.
Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $6.02 per share and revenue of $16.52 billion, indicating changes of +304.07% and +15.31%, respectively, compared to the previous year.
Investors should also note any recent changes to analyst estimates for Spotify. These revisions help to show the ever-changing nature of near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the company’s business and profitability.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 3.51% lower. Right now, Spotify possesses a Zacks Rank of #3 (Hold).
In terms of valuation, Spotify is presently being traded at a Forward P/E ratio of 78.35. This valuation marks a premium compared to its industry’s average Forward P/E of 27.73.
The Technology Services industry is part of the Business Services sector. Currently, this industry holds a Zacks Industry Rank of 61, positioning it in the top 25% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
