Spotify Technology S.A. (NYSE:SPOT) is scheduled to report second-quarter earnings before the open tomorrow. According to Zacks Research, analysts expect earnings of $3.27 per share on revenue of $5.55 billion, representing year-over-year increases of 781.3% and 16.7%, respectively. Investors will be watching for updates on subscriber growth, premium pricing, and advertising revenue.
SPOT was last seen little changed at $500.51. This area coincides with shares' descending 200-day moving average, and stepped up as resistance during last months 8.9% rally. Year to date, the stock is down 13.8%, though it has added 14.2% in the last three months.
Options traders are pricing in a 13.5% post-earnings move, regardless of direction, which is above Spotify stock's average post-earnings swing of 10.1% over the last eight quarters. The streaming giant has been volatile after earnings, with moves exceeding 10% in six of those reports, including a 12.4% drop in April and a 14.7% rally in February.
Options traders have remained optimistic heading into the event. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), Spotify's 10-day call/put volume ratio of 1.85 ranks higher than all other readings from the past year, indicating unusually strong demand for bullish bets ahead of earnings.
