In the latest trading session, Spotify (SPOT) closed at $725.05, marking a +2.19% move from the previous day. The stock outperformed the S&P 500, which registered a daily gain of 0.83%. On the other hand, the Dow registered a gain of 0.77%, and the technology-centric Nasdaq increased by 1.02%.
Prior to today's trading, shares of the music-streaming service operator had gained 1.2% lagged the Computer and Technology sector's gain of 8.25% and the S&P 500's gain of 4.99%.
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 July 29, 2025. The company is predicted to post an EPS of $2.29, indicating a 60.14% growth compared to the equivalent quarter last year. Our most recent consensus estimate is calling for quarterly revenue of $4.79 billion, up 16.93% from the year-ago period.
SPOT's full-year Zacks Consensus Estimates are calling for earnings of $9.22 per share and revenue of $19.94 billion. These results would represent year-over-year changes of +54.96% and +17.6%, respectively.
It is also important to note the recent changes to analyst estimates for Spotify. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.
Based on our research, we believe these estimate revisions are directly related to near-term stock moves. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational 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 1.97% upward. Spotify is currently a Zacks Rank #3 (Hold).
Digging into valuation, Spotify currently has a Forward P/E ratio of 76.94. This represents a premium compared to its industry average Forward P/E of 28.74.
Meanwhile, SPOT's PEG ratio is currently 1.87. 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. SPOT's industry had an average PEG ratio of 2.22 as of yesterday's close.
The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 46, putting it in the top 19% of all 250+ industries.
The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming 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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