In the latest close session, Spotify (SPOT) was up +2.57% at $749.91. The stock outpaced the S&P 500's daily gain of 1.11%. Elsewhere, the Dow saw an upswing of 1.19%, while the tech-heavy Nasdaq appreciated by 1.43%.
The stock of music-streaming service operator has risen by 11.83% in the past month, leading the Computer and Technology sector's gain of 5.67% and the S&P 500's gain of 3.92%.
The upcoming earnings release of Spotify will be of great interest to investors. It is anticipated that the company will report an EPS of $2.34, marking a 63.64% rise compared to the same quarter of the previous year. Meanwhile, the latest consensus estimate predicts the revenue to be $4.79 billion, indicating a 16.93% increase compared to the same quarter of the previous year.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $9.26 per share and revenue of $19.94 billion. These totals would mark changes of +55.63% and +17.6%, respectively, from last year.
Investors might also notice recent changes to analyst estimates for Spotify. Such recent modifications usually signify the changing landscape of near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.
Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.62% higher within the past month. Spotify currently has a Zacks Rank of #3 (Hold).
Investors should also note Spotify's current valuation metrics, including its Forward P/E ratio of 78.95. This valuation marks a premium compared to its industry average Forward P/E of 28.
We can also see that SPOT currently has a PEG ratio of 1.92. 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 2.2.
The Internet - Software industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 46, positioning it in the top 19% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual 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.
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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