In the latest trading session, Spotify (SPOT) closed at $508.58, marking a +1.64% move from the previous day. This move outpaced the S&P 500's daily gain of 0.54%. Meanwhile, the Dow gained 1.05%, and the Nasdaq, a tech-heavy index, added 0.56%.
Prior to today's trading, shares of the music-streaming service operator had lost 12.98% lagged the Computer and Technology sector's gain of 0.44% and the S&P 500's gain of 0.74%.
The upcoming earnings release of Spotify will be of great interest to investors. The company's earnings report is expected on February 10, 2026. On that day, Spotify is projected to report earnings of $2.95 per share, which would represent year-over-year growth of 56.91%. Meanwhile, the latest consensus estimate predicts the revenue to be $5.16 billion, indicating a 14.04% increase compared to the same quarter of the previous year.
For the full year, the Zacks Consensus Estimates are projecting earnings of $8.12 per share and revenue of $19.66 billion, which would represent changes of +36.47% and 0%, respectively, from the prior year.
Investors should also pay attention to any latest changes in analyst estimates for Spotify. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. 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 shifted 5% downward. Currently, Spotify is carrying a Zacks Rank of #3 (Hold).
Investors should also note Spotify's current valuation metrics, including its Forward P/E ratio of 37.49. This expresses a premium compared to the average Forward P/E of 22.53 of its industry.
Meanwhile, SPOT's PEG ratio is currently 0.96. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. As of the close of trade yesterday, the Internet - Software industry held an average PEG ratio of 1.29.
The Internet - Software industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 83, this industry ranks in the top 34% of all industries, numbering over 250.
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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