In the latest close session, Spotify (SPOT) was up +1.24% at $586.57. The stock's performance was ahead of the S&P 500's daily gain of 0.32%. Elsewhere, the Dow saw an upswing of 0.6%, while the tech-heavy Nasdaq appreciated by 0.22%.
Heading into today, shares of the music-streaming service operator had lost 1.04% over the past month, lagging the Computer and Technology sector's gain of 5.41% and the S&P 500's gain of 4.7%.
Market participants will be closely following the financial results of Spotify in its upcoming release. It is anticipated that the company will report an EPS of $3.2, marking a 70.21% rise compared to the same quarter of the previous year. Alongside, our most recent consensus estimate is anticipating revenue of $5.1 billion, indicating a 12.75% upward movement from the same quarter last year.
For the full year, the Zacks Consensus Estimates are projecting earnings of $7.91 per share and revenue of $19.52 billion, which would represent changes of +32.94% and +15.16%, respectively, from the prior year.
Any recent changes to analyst estimates for Spotify should also be noted by investors. Such recent modifications usually signify the changing landscape of near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 2.46% higher. As of now, Spotify holds a Zacks Rank of #2 (Buy).
With respect to valuation, Spotify is currently being traded at a Forward P/E ratio of 73.28. This valuation marks a premium compared to its industry average Forward P/E of 29.26.
We can additionally observe that SPOT currently boasts a PEG ratio of 1.87. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. As the market closed yesterday, the Internet - Software industry was having an average PEG ratio of 1.84.
The Internet - Software industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 52, positioning it in the top 22% of all 250+ industries.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Be sure to follow all of these stock-moving metrics, and many 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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