In the latest close session, Spotify (SPOT) was down 1.54% at $710.19. The stock trailed the S&P 500, which registered a daily loss of 0.03%. On the other hand, the Dow registered a loss of 0.11%, and the technology-centric Nasdaq increased by 0.13%.
Shares of the music-streaming service operator have appreciated by 9.52% over the course of the past month, outperforming the Computer and Technology sector's gain of 3.02%, and the S&P 500's gain of 0.6%.
Market participants will be closely following the financial results of Spotify in its upcoming release. The company's upcoming EPS is projected at $2.34, signifying a 63.64% increase compared to the same quarter of the previous year. Our most recent consensus estimate is calling for quarterly revenue of $4.79 billion, up 16.93% from the year-ago period.
For the full year, the Zacks Consensus Estimates are projecting earnings of $9.26 per share and revenue of $19.94 billion, which would represent changes of +55.63% and +17.6%, respectively, from the prior year.
It is also important to note the recent changes to analyst estimates for Spotify. 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.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Within the past 30 days, our consensus EPS projection has moved 0.62% higher. Spotify is currently sporting a Zacks Rank of #3 (Hold).
Investors should also note Spotify's current valuation metrics, including its Forward P/E ratio of 77.88. Its industry sports an average Forward P/E of 28.07, so one might conclude that Spotify is trading at a premium comparatively.
Investors should also note that SPOT has a PEG ratio of 1.89 right now. 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 of the close of trade yesterday, the Internet - Software industry held an average PEG ratio of 2.17.
The Internet - Software industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 53, positioning it in the top 22% 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.
Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.
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Spotify Technology (SPOT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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