Evercore Cuts Spotify Price Target to $700 Amid User Growth
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Should l Buy SPOT?
Source: stocktwits
- Strong User Growth: Spotify's latest quarter saw monthly active users grow by 11% year-on-year to 751 million, while premium subscribers increased by 10% to 290 million, demonstrating the company's ongoing success in user acquisition despite intensifying market competition.
- Financial Performance Exceeds Expectations: Spotify reported a fourth-quarter net income of €1.17 billion (approximately $1.39 billion) with earnings per share of €4.43, significantly up from €367 million (or €1.76 per share) a year earlier, surpassing analysts' expectations of €2.78 per share, indicating a notable improvement in profitability.
- Analyst Rating Adjustments: Evercore ISI lowered Spotify's price target from $750 to $700 while maintaining an 'Outperform' rating, reflecting a cautious outlook on 2027 revenue estimates, which are expected to decrease by 4%-5%, potentially impacting investor confidence.
- Market Sentiment Shift: Over the past 24 hours, Stocktwits users' sentiment around SPOT shares surged from 'bullish' to 'extremely bullish', with message volumes jumping 720%, indicating optimistic expectations for Spotify's future performance, despite its stock price declining nearly 25% over the past year.
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Analyst Views on SPOT
Wall Street analysts forecast SPOT stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for SPOT is 750.79 USD with a low forecast of 525.00 USD and a high forecast of 900.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
21 Analyst Rating
15 Buy
6 Hold
0 Sell
Moderate Buy
Current: 414.840
Low
525.00
Averages
750.79
High
900.00
Current: 414.840
Low
525.00
Averages
750.79
High
900.00
About SPOT
Spotify Technology SA a Luxembourg-based company, which offers digital music-streaming services. The Company enables users to discover new releases, which includes the latest singles and albums; playlists, which includes ready-made playlists put together by music fans and experts, and over millions of songs so that users can play their favorites, discover new tracks and build a personalized collection. Its users can either select Spotify Free, which includes only shuffle play or Spotify Premium, which encompasses a range of features, such as shuffle play, advertisement free, unlimited skips, listen offline, play any track and audio. The Company operates through a number of subsidiaries, including Spotify LTD and is present in over 20 countries. Its service offers a music listening experience without commercial breaks.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Spotify Stock Surges 18% After Strong Quarter
- User Growth Surge: Spotify reported a significant increase in user numbers in its latest quarterly report, driving an 18% stock price surge, which reflects the company's growing market appeal and user retention amid fierce competition.
- Solid Revenue Growth: Despite price hikes, Spotify's revenue continues to grow robustly, indicating that its pricing power is improving and suggesting a positive outlook for future revenue.
- Strong Cash Flow Performance: The company reported strong free cash flow, dispelling market doubts about its profitability and boosting investor confidence in its long-term value.
- Positive Market Reaction: Investors are showing tolerance for Spotify's high valuation, primarily due to improving margins and strong cash flow, indicating market recognition of its future growth potential.
See More
Evercore Cuts Spotify Price Target to $700 Amid User Growth
- Strong User Growth: Spotify's latest quarter saw monthly active users grow by 11% year-on-year to 751 million, while premium subscribers increased by 10% to 290 million, demonstrating the company's ongoing success in user acquisition despite intensifying market competition.
- Financial Performance Exceeds Expectations: Spotify reported a fourth-quarter net income of €1.17 billion (approximately $1.39 billion) with earnings per share of €4.43, significantly up from €367 million (or €1.76 per share) a year earlier, surpassing analysts' expectations of €2.78 per share, indicating a notable improvement in profitability.
- Analyst Rating Adjustments: Evercore ISI lowered Spotify's price target from $750 to $700 while maintaining an 'Outperform' rating, reflecting a cautious outlook on 2027 revenue estimates, which are expected to decrease by 4%-5%, potentially impacting investor confidence.
- Market Sentiment Shift: Over the past 24 hours, Stocktwits users' sentiment around SPOT shares surged from 'bullish' to 'extremely bullish', with message volumes jumping 720%, indicating optimistic expectations for Spotify's future performance, despite its stock price declining nearly 25% over the past year.
See More
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- Employment Cost Index Decline: The Q4 employment cost index rose by 0.7% quarter-over-quarter, below the expected 0.8%, marking the smallest increase in 4.5 years, suggesting easing labor cost pressures that may influence Federal Reserve monetary policy decisions.
- Positive Earnings Outlook: More than half of S&P 500 companies have reported earnings, with 79% exceeding expectations, and Q4 earnings growth is projected at 8.4%, reflecting strong corporate profitability that could support stock market performance.
- Market Focus on Economic Data: This week, the market will concentrate on upcoming economic data releases, including non-farm payrolls and CPI, which are expected to influence investor expectations regarding future interest rate policies and subsequently affect stock market volatility.
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- U.S. Stock Market Performance: Stock indexes in the U.S. closed mixed on Tuesday, with the S&P 500 increasing by 0.10%.
- Decline in Other Indexes: The Dow Jones Industrial Average declined by 0.33%, while the Nasdaq Composite fell by 0.59%.
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- Market Performance: The S&P 500 index rose by 0.18%, the Dow Jones Industrial Average increased by 0.46%, and the Nasdaq 100 gained 0.15%, indicating market resilience despite weak economic data, although stagnant retail sales may impact consumer spending.
- Economic Data Impact: December retail sales were unchanged, falling short of the expected 0.4%, while the Q4 employment cost index rose by 0.7% quarter-over-quarter, below the anticipated 0.8%, which could lead to a downward revision of Q4 GDP, reflecting potential economic slowdown.
- Earnings Season: More than half of S&P 500 companies have reported earnings, with 79% of the 297 companies exceeding expectations, and Q4 earnings growth is projected at 8.4%, indicating strong corporate performance that may support the stock market.
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Spotify Stock Surges 18% After Strong Quarter
- User Growth Surge: Spotify reported a significant increase in user numbers in its latest quarterly report, driving an 18% stock price surge, which reflects the company's growing market appeal and user retention amid fierce competition.
- Solid Revenue Growth: Despite price hikes, Spotify's revenue continues to grow robustly, indicating that its pricing power is improving and suggesting a positive outlook for future revenue.
- Strong Cash Flow Performance: The company reported strong free cash flow, dispelling market doubts about its profitability and boosting investor confidence in its long-term value.
- Positive Market Reaction: Investors are showing tolerance for Spotify's high valuation, primarily due to improving margins and strong cash flow, indicating market recognition of its future growth potential.
See More
Evercore Cuts Spotify Price Target to $700 Amid User Growth
- Strong User Growth: Spotify's latest quarter saw monthly active users grow by 11% year-on-year to 751 million, while premium subscribers increased by 10% to 290 million, demonstrating the company's ongoing success in user acquisition despite intensifying market competition.
- Financial Performance Exceeds Expectations: Spotify reported a fourth-quarter net income of €1.17 billion (approximately $1.39 billion) with earnings per share of €4.43, significantly up from €367 million (or €1.76 per share) a year earlier, surpassing analysts' expectations of €2.78 per share, indicating a notable improvement in profitability.
- Analyst Rating Adjustments: Evercore ISI lowered Spotify's price target from $750 to $700 while maintaining an 'Outperform' rating, reflecting a cautious outlook on 2027 revenue estimates, which are expected to decrease by 4%-5%, potentially impacting investor confidence.
- Market Sentiment Shift: Over the past 24 hours, Stocktwits users' sentiment around SPOT shares surged from 'bullish' to 'extremely bullish', with message volumes jumping 720%, indicating optimistic expectations for Spotify's future performance, despite its stock price declining nearly 25% over the past year.
See More
US Retail Sales Weakness Impacts Markets
- Retail Sales Stagnation: US retail sales for December were unchanged month-over-month, falling short of the +0.4% expectation, indicating weakness in consumer spending that could lead to a downward revision in Q4 GDP, thereby impacting overall economic growth forecasts.
- Employment Cost Index Decline: The Q4 employment cost index rose by 0.7% quarter-over-quarter, below the expected 0.8%, marking the smallest increase in 4.5 years, suggesting easing labor cost pressures that may influence Federal Reserve monetary policy decisions.
- Positive Earnings Outlook: More than half of S&P 500 companies have reported earnings, with 79% exceeding expectations, and Q4 earnings growth is projected at 8.4%, reflecting strong corporate profitability that could support stock market performance.
- Market Focus on Economic Data: This week, the market will concentrate on upcoming economic data releases, including non-farm payrolls and CPI, which are expected to influence investor expectations regarding future interest rate policies and subsequently affect stock market volatility.
See More
U.S. Markets Closed Tuesday with Mixed Results as Spotify Technology Outperformed and Medpace Holdings Underperformed
- U.S. Stock Market Performance: Stock indexes in the U.S. closed mixed on Tuesday, with the S&P 500 increasing by 0.10%.
- Decline in Other Indexes: The Dow Jones Industrial Average declined by 0.33%, while the Nasdaq Composite fell by 0.59%.
See More
Analysis of Significant Stock Movements Among Companies
- Amentum Holdings Decline: Amentum Holdings' stock fell approximately 12% after fiscal Q1 revenue and adjusted EBITDA missed Wall Street analysts' consensus estimates, indicating market concerns over its financial performance and potential future financing capabilities.
- BP Suspends Buyback: BP Plc suspended its stock buyback program to strengthen its balance sheet, resulting in a 6% drop in its ADRs in the U.S., reflecting the company's cautious approach amid market volatility.
- ZoomInfo Downgrade: ZoomInfo Technologies forecasted first-quarter earnings per share between 25 to 27 cents, below analysts' expectations of 27 cents, leading to a 10% decline in its stock price, which may affect market confidence and investor sentiment.
- Ichor Holdings Surge: Ichor Holdings' shares soared 37% to a 52-week high due to strong demand driving a fourth-quarter earnings beat, highlighting the recovery potential in the semiconductor equipment market.
See More
US Stocks Edge Up as Retail Sales Weaken
- Market Performance: The S&P 500 index rose by 0.18%, the Dow Jones Industrial Average increased by 0.46%, and the Nasdaq 100 gained 0.15%, indicating market resilience despite weak economic data, although stagnant retail sales may impact consumer spending.
- Economic Data Impact: December retail sales were unchanged, falling short of the expected 0.4%, while the Q4 employment cost index rose by 0.7% quarter-over-quarter, below the anticipated 0.8%, which could lead to a downward revision of Q4 GDP, reflecting potential economic slowdown.
- Earnings Season: More than half of S&P 500 companies have reported earnings, with 79% of the 297 companies exceeding expectations, and Q4 earnings growth is projected at 8.4%, indicating strong corporate performance that may support the stock market.
- Rate Expectations: The market is pricing in a 22% chance of a 25 basis point rate cut at the Fed's March policy meeting, reflecting cautious optimism among investors regarding future monetary policy, especially in light of the current weak economic data.
See More
