Spotify Achieves 19.3% CAGR Since IPO, Outperforming S&P 500
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Source: Fool
- Strong Investment Returns: Since its 2018 IPO, Spotify has achieved a compound annual growth rate of 19.3%, significantly outperforming the S&P 500, indicating its robust performance and investment appeal in the music streaming market.
- User Growth Potential: Although Spotify's premium subscribers are still less than 40%, these users account for nearly 90% of its revenue, highlighting substantial room for improvement in user conversion and revenue growth.
- Podcast Strategy Outlook: Spotify's substantial investments in exclusive podcast rights, while costly, are expected to attract a larger audience and lead to long-term advertising revenue growth, further solidifying its market position.
- Technology Innovation Drive: By actively embracing artificial intelligence technologies to enhance user engagement, Spotify demonstrates its commitment and capability to maintain competitiveness in a rapidly evolving market.
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 777.67 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.
26 Analyst Rating
18 Buy
8 Hold
0 Sell
Moderate Buy
Current: 576.680
Low
525.00
Averages
777.67
High
900.00
Current: 576.680
Low
525.00
Averages
777.67
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.
