I made chat GPT write this because i was too lazy;
ps. (The intrinsic value for the stock right now is between $400 and $2900)
Q. Why is Spotify stock doing so good this year.
A.
1. First-ever full-year profit in 2024
Spotify swung to a €1.1 billion net profit in 2024—its first annual profit—on the back of cost-cutting, layoffs, and effective pricing. Margin improvements (gross margin hit 30–32%) and leaner operating expenses fueled this turnaround.
2. Robust user growth and pricing power
Monthly Active Users (MAUs) rose 10–12% year-over-year to roughly 675–700 million, with 263–268 million premium subscribers
Spotify has successfully raised subscription prices—and free users haven't objected, demonstrating strong loyalty and pricing resilience.
3. Diverse revenue mix
Spotify’s expanding beyond music—podcasts, audiobooks, video podcasts, and AI-powered ad tools are creating new monetization channels. Podcast ad tech and AI-enabled features like “AI Ads” and smart playlists enhance advertiser value.
4. Analyst upgrades and bullish sentiment
Pivotal Research just raised its price target to $900, praising Spotify’s dominance in audio streaming, user-friendly UI, under‑penetrated global markets, and ad business improvements. Evercore ISI and others raised targets to near $750 and reaffirmed outperform ratings. Most analysts rate SPOT a Buy.
5. Strategic partnerships & scalable economics
A renewed deal with Universal boosted confidence in Spotify’s content licensing and pipeline. Hedge fund accumulation and strong ROI (ROIC ~23%) reflect effective capital use.
6. Resilience in uncertain economies
Subscription-based services, especially freemium models, are seen as defensive in slower economies. With strong retention (“stickiness” due to loyalty and seamless experience), Spotify keeps users even with higher prices.
ps. (The intrinsic value for the stock right now is between $400 and $2900)
Q. Why is Spotify stock doing so good this year.
A.
1. First-ever full-year profit in 2024
Spotify swung to a €1.1 billion net profit in 2024—its first annual profit—on the back of cost-cutting, layoffs, and effective pricing. Margin improvements (gross margin hit 30–32%) and leaner operating expenses fueled this turnaround.
2. Robust user growth and pricing power
Monthly Active Users (MAUs) rose 10–12% year-over-year to roughly 675–700 million, with 263–268 million premium subscribers
Spotify has successfully raised subscription prices—and free users haven't objected, demonstrating strong loyalty and pricing resilience.
3. Diverse revenue mix
Spotify’s expanding beyond music—podcasts, audiobooks, video podcasts, and AI-powered ad tools are creating new monetization channels. Podcast ad tech and AI-enabled features like “AI Ads” and smart playlists enhance advertiser value.
4. Analyst upgrades and bullish sentiment
Pivotal Research just raised its price target to $900, praising Spotify’s dominance in audio streaming, user-friendly UI, under‑penetrated global markets, and ad business improvements. Evercore ISI and others raised targets to near $750 and reaffirmed outperform ratings. Most analysts rate SPOT a Buy.
5. Strategic partnerships & scalable economics
A renewed deal with Universal boosted confidence in Spotify’s content licensing and pipeline. Hedge fund accumulation and strong ROI (ROIC ~23%) reflect effective capital use.
6. Resilience in uncertain economies
Subscription-based services, especially freemium models, are seen as defensive in slower economies. With strong retention (“stickiness” due to loyalty and seamless experience), Spotify keeps users even with higher prices.
Declinazione di responsabilità
Le informazioni ed i contenuti pubblicati non costituiscono in alcun modo una sollecitazione ad investire o ad operare nei mercati finanziari. Non sono inoltre fornite o supportate da TradingView. Maggiori dettagli nelle Condizioni d'uso.
Declinazione di responsabilità
Le informazioni ed i contenuti pubblicati non costituiscono in alcun modo una sollecitazione ad investire o ad operare nei mercati finanziari. Non sono inoltre fornite o supportate da TradingView. Maggiori dettagli nelle Condizioni d'uso.