In the latest trading session, Spotify (SPOT) closed at $681.42, marking a +1.03% move from the previous day. The stock exceeded the S&P 500, which registered a gain of 0.07% for the day. Meanwhile, the Dow experienced a drop of 0.7%, and the technology-dominated Nasdaq saw an increase of 0.18%.
Shares of the music-streaming service operator have depreciated by 8.4% over the course of the past month, underperforming the Computer and Technology sector's gain of 8.22%, and the S&P 500's gain of 5.71%.
The investment community will be closely monitoring the performance of Spotify in its forthcoming earnings report. The company is scheduled to release its earnings on July 29, 2025. The company's earnings per share (EPS) are projected to be $2.19, reflecting a 53.15% increase from the same quarter last year. Meanwhile, our latest consensus estimate is calling for revenue of $4.93 billion, up 20.27% from the prior-year quarter.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $9.12 per share and revenue of $20.5 billion. These totals would mark changes of +53.28% and +20.92%, respectively, from last year.
Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Spotify. These revisions typically reflect the latest short-term business trends, which can change frequently. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.
Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, there's been a 1.53% fall in the Zacks Consensus EPS estimate. Spotify is holding a Zacks Rank of #3 (Hold) right now.
In the context of valuation, Spotify is at present trading with a Forward P/E ratio of 73.95. This indicates a premium in contrast to its industry's Forward P/E of 29.49.
Also, we should mention that SPOT has a PEG ratio of 1.79. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The average PEG ratio for the Internet - Software industry stood at 2.22 at the close of the market yesterday.
The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 73, putting it in the top 30% of all 250+ industries.
The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and much more, on Zacks.com.
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Spotify Technology (SPOT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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