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Spotify Revenue Hits $4.94B, Analysts Maintain Buy Ratings
Spotify Technology (NYSE:SPOT) has captured investor attention with a mix of analyst optimism, institutional activity, and its latest financial performance. With streaming platforms continuing to dominate global entertainment, Spotify remains at the forefront, balancing revenue growth with operational challenges.
Analyst Ratings and Price Targets
According to MarketBeat Ratings, Spotify has an average rating of “Moderate Buy” from 32 brokerages covering the company. Of these, 21 analysts have assigned a buy rating, 10 a hold, and one a strong buy, reflecting cautious optimism in the market.
The average one-year price target across these analysts sits at $726.84, suggesting potential upside from the current trading level. Recent research reports highlight divergent perspectives:
- Goldman Sachs raised its price objective from $680 to $775, maintaining a buy rating.
- Morgan Stanley slightly reduced its target from $850 to $800, keeping an overweight rating.
- Rosenblatt Securities lowered its target to $679, with a neutral rating.
- Wells Fargo increased its price objective to $750, alongside an overweight rating.
- KeyCorp trimmed its target from $860 to $830, maintaining an overweight rating.
These shifts underline analysts’ varied perspectives, balancing Spotify’s revenue growth against EPS performance and market volatility.
Institutional Investment Activity
Spotify has drawn significant interest from institutional investors and hedge funds, with 84.09% of its stock currently held by such entities. Recent movements include:
- Sapient Capital LLC initiated a position worth approximately $322,000 in Q2.
- Legacy Capital Group California Inc. boosted its holding by 110.9%, now owning 3,896 shares valued at $2.99 million.
- Swedbank AB increased its stake by 1.4%, holding 959,587 shares worth over $527 million.
- Harbor Investment Advisory LLC raised its position by 36%, totaling 2,054 shares valued at $1.58 million.
- Integrated Wealth Concepts LLC expanded its holdings by 39.8%, reaching 2,702 shares valued at $1.49 million.
This level of institutional ownership reflects confidence in Spotify’s long-term growth prospects, even amid earnings volatility.
Trading Performance and Key Metrics
On Friday, SPOT opened at $715.87, moving within a 52-week range of $362.31 to $785.00. The stock carries a market capitalization of $146.55 billion, a PE ratio of 173.76, and a price-to-earnings-growth (PEG) ratio of 3.06, signaling a premium valuation.
Technical indicators show a 50-day moving average of $694.06 and a 200-day moving average of $659.48, suggesting upward momentum in the medium term. The stock also displays a beta of 1.71, indicating higher volatility relative to the broader market.
Earnings Snapshot and Revenue Growth
Spotify recently released Q2 2025 earnings, posting ($0.42) EPS, falling short of analyst expectations of $2.00 EPS. Despite this, revenue reached $4.94 billion, exceeding the consensus estimate of $4.29 billion and marking a 10.1% increase year-over-year.
The company reported a net margin of 4.76% and a return on equity of 13.67%, highlighting profitability despite EPS misses. For context, Spotify posted $1.33 EPS in the same quarter last year.
Looking forward, Spotify has issued Q3 2025 EPS guidance, with analysts projecting a 10.3 EPS for the current fiscal year.
Business Segments and Growth Drivers
Spotify operates through two primary segments:
- Premium: Offers ad-free online and offline streaming access to its catalog of music and podcasts.
- Ad-Supported: Generates revenue from advertising for users accessing content for free.
This dual-segment model allows Spotify to capture both subscription revenue and advertising opportunities, driving long-term revenue diversification.
Investor Takeaways and Market Outlook
Despite a mixed earnings report, Spotify’s strong revenue growth, active institutional participation, and continued analyst support reflect optimism about its long-term potential. The divergence in price targets, ranging from $679 to $775, suggests analysts are weighing growth opportunities against EPS volatility and market conditions.
Investors are closely monitoring trading levels near $715, with the 50- and 200-day moving averages providing key technical support. Meanwhile, institutional ownership above 84% underscores confidence from long-term investors.
Spotify’s ability to balance premium subscription growth, ad-supported revenue, and global expansion will be crucial in maintaining momentum and achieving analyst price targets.
