SPOT Should I Buy
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Spotify Technology SA (SPOT) is not a strong buy at the moment for a beginner investor with a long-term horizon. While the company has shown strong financial performance in Q4 2025 and has positive growth trends, the technical indicators and mixed analyst sentiment suggest caution. Additionally, there are concerns about structural changes in the premium music streaming industry due to AI, which could impact long-term growth. The stock's current pre-market price of $448.6 is below key resistance levels, and there are no strong proprietary trading signals to suggest immediate upside potential.
The MACD is positive and expanding, indicating bullish momentum. However, the RSI is neutral at 42.189, and the moving averages are bearish (SMA_200 > SMA_20 > SMA_5). The stock is trading below the pivot level of 459.461, with key support at 417.395 and resistance at 501.527. This suggests limited immediate upside potential.
Q4 2025 financials showed strong growth: revenue increased by 6.81% YoY, net income surged by 219.89% YoY, and EPS grew by 219.43% YoY.
Monthly active users grew by 11% YoY to 751 million, and revenue increased by 13% to €4.5 billion ($5.4 billion).
The company is focusing on AI strategy with a dual-CEO model, which could enhance decision-making and innovation.
Analysts have lowered price targets across the board, citing concerns about AI's impact on the premium music streaming industry and structural changes.
The stock's valuation is considered premium, and there is uncertainty about long-term growth.
The options market shows bearish sentiment, with a high put-call volume ratio of 4.67.
Spotify delivered solid Q4 2025 results with revenue of €4.53 billion ($5.4 billion), up 6.81% YoY. Net income surged to €1.17 billion ($1.3 billion), up 219.89% YoY, and EPS increased to €5.59, up 219.43% YoY. Gross margin improved to 33.08%, up 2.57% YoY.
Analyst sentiment is mixed. While some firms like UBS and BofA maintain Buy ratings with price targets above $700, others like Pivotal Research downgraded the stock to Hold with a significantly reduced price target of $420, citing structural changes in the industry and AI-related risks. The average price target has been lowered across the board.
