In the latest trading session, Spotify (SPOT) closed at $647.08, marking a -3.97% move from the previous day. This move lagged the S&P 500's daily gain of 0.79%. Elsewhere, the Dow saw an upswing of 1.01%, while the tech-heavy Nasdaq appreciated by 1.15%.
Prior to today's trading, shares of the music-streaming service operator had lost 5.44% lagged the Computer and Technology sector's gain of 1.2% and the S&P 500's gain of 1.27%.
Market participants will be closely following the financial results of Spotify in its upcoming release. The company plans to announce its earnings on November 4, 2025. The company is expected to report EPS of $1.85, up 16.35% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4.89 billion, up 11.62% from the year-ago period.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $5.46 per share and revenue of $19.9 billion. These totals would mark changes of -8.24% and +17.38%, respectively, from last year.
Investors should also note any recent changes to analyst estimates for Spotify. Recent revisions tend to reflect the latest near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.
Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.
The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 5.31% lower. Currently, Spotify is carrying a Zacks Rank of #4 (Sell).
In terms of valuation, Spotify is presently being traded at a Forward P/E ratio of 123.34. Its industry sports an average Forward P/E of 29.93, so one might conclude that Spotify is trading at a premium comparatively.
One should further note that SPOT currently holds a PEG ratio of 3.21. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. SPOT's industry had an average PEG ratio of 2.12 as of yesterday's close.
The Internet - Software industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 66, finds itself in the top 27% echelons of all 250+ industries.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
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Spotify Technology (SPOT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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