Spotify:Quarterly Results/2024 Q3: Difference between revisions

Spotify:Quarterly Results/2024 Q3 (view source)

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-== Analysts Opinions ==
+== Recent Analysts Opinions ==
+=== Spotify to see further expansion in gross margin ===
+* Overweight, $420->$470: Wells Fargo expects Spotify's gross margin to expand further. "Our analysis of incremental gross margins indicates further expansion ahead of consensus. We think Spotify's strategy+ evolving industry dynamics support the flow-through."<ref>https://www.cnbc.com/2024/10/28/monday-wall-street-analyst-calls-like-nvidia.html</ref>
+* Buy, $425->$430: Goldman Sachs said Spotify is beginning to show signs of the gross and operating margin trajectory that the company guided dating back to 3 to 5 years. They added that Spotify remains a global audio platform leader which will support user growth, growing engagement and pricing power<ref>https://thefly.com/permalinks/entry.php/id3993651/SPOT-Spotify-price-target-raised-by--at-Goldman-Sachs-heres-why</ref>.
+=== Management is focused on financial discipline and profitability and the company has best-in-class product offering ===
+* Overweight, $400->$430: Morgan Stanley said they are bullish on Spotify due to its best-in-class products, runway in user growth, pricing power and continued focus on financial discipline and profitability by the management<ref>https://thefly.com/permalinks/entry.php/id4003288/SPOT-Spotify-price-target-raised-by--at-Morgan-Stanley-heres-why</ref>.
+* Buy, $460->$510:Pivotal Research said Spotify is the “clear winner of the global audio streaming battle” due to its “best-in-class” user-interface and content recommendation engine. They expect higher medium and long term average revenue per user (ARPU and subscriber forecasts<ref>https://www.tipranks.com/news/the-fly/spotify-price-target-raised-to-510-from-460-at-pivotal-research</ref>.
+=== Share price reset might present an opportunity ===
+* Buy, $399->$438: Rosenblatt said Spotify has a lot of "good new tailwinds". However, they think that since the shares are up 98% year-to- date, a "near-term reset might present an opportunity"<ref>https://thefly.com/permalinks/entry.php/id4000025/SPOT-Spotify-price-target-raised-by--at-Rosenblatt-heres-why</ref>.
+=== There are few surprises on Q3 print ===
+* Overweight, $440->$490: Keybanc said there are few surprises on Q3 print, outside of social charges and FX. They pointed out that bundling adoption seems to be going on well. They also highlighted that consensus gross margin and operating margin for Q4 and through 2025 continue to look low. However, they think that the product cycle and moderating competitive landscape supports at least 15% annual growth revenue and operating margin of 15% by 2026<ref>https://thefly.com/permalinks/entry.php/id3998984/SPOT-Spotify-price-target-raised-by--at-KeyBanc-heres-why</ref>.
+=== Spotify continues to increase prices ===
+* Outperform, $400: Wolfe Research said that they believe Spotify secretly increased prices Canada, New Zealand, and Ireland, effective October 2. They based their argument on pricing list at Spotify's website and a blog post in Canada. They expect this price increases to provide a tailwind in Q4 gross margin. The firm also expects Spotify's tiering strategy in these markets to be similar to that of U.S where cheaper “music-only” tiers are only available at the pre-price hike level<ref>https://www.tipranks.com/news/the-fly/wolfe-says-spotify-price-increases-should-provide-tailwind-to-q4-gross-margins</ref>.
 == Insights ==