In the latest trading session, Spotify (SPOT) closed at $513.21, marking a +2.92% move from the previous day. The stock outpaced the S&P 500's daily gain of 0.03%. Elsewhere, the Dow lost 0.58%, while the tech-heavy Nasdaq added 0.28%.
The music-streaming service operator's stock has dropped by 14.99% in the past month, falling short of the Computer and Technology sector's gain of 0.43% and the S&P 500's gain of 0.6%.
The investment community will be paying close attention to the earnings performance of Spotify in its upcoming release. The company is slated to reveal its earnings on February 10, 2026. On that day, Spotify is projected to report earnings of $2.97 per share, which would represent year-over-year growth of 57.98%. Meanwhile, our latest consensus estimate is calling for revenue of $5.13 billion, up 13.43% from the prior-year quarter.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $7.7 per share and revenue of $19.65 billion. These totals would mark changes of +29.41% and 0%, respectively, from last year.
Investors should also note any recent changes to analyst estimates for Spotify. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the business and profitability.
Our research suggests that these changes in estimates have a direct relationship with upcoming 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, 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, the Zacks Consensus EPS estimate has moved 5.7% lower. Spotify is currently a Zacks Rank #3 (Hold).
Looking at valuation, Spotify is presently trading at a Forward P/E ratio of 37.05. Its industry sports an average Forward P/E of 23.85, so one might conclude that Spotify is trading at a premium comparatively.
We can additionally observe that SPOT currently boasts a PEG ratio of 0.94. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Internet - Software was holding an average PEG ratio of 1.4 at yesterday's closing price.
The Internet - Software industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 69, positioning it in the top 29% of all 250+ industries.
The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in 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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