Spotify Stock Has Soared 142% In 2024. Is It Too Late to Buy?

Core Insights - Spotify's stock has surged 142% this year, significantly outperforming the S&P 500's 23% return [1][2] - The company has achieved record subscriber numbers, strong revenue growth, and surging profits, indicating substantial growth potential [2][7] - Spotify's market share in the music streaming industry is 31.7%, far ahead of its closest competitor, Tencent Music, at 14.4% [3] Subscriber and Revenue Growth - Spotify reported 640 million monthly active users in Q3 2024, including 252 million premium subscribers, which exceeded management's forecast by 1 million [7] - Total revenue reached a record $4.2 billion in Q3, marking a 19$316 million in net income during the quarter, a 361% increase from the previous year, indicating strong profitability [9] Market Position and Valuation - Spotify is approaching a market capitalization of $100 billion, but its current price-to-sales (P/S) ratio of 5.8 is 52$100 billion in annual revenue by 2032, which would imply a forward P/S ratio of around 0.9 [11][12] Innovation and Engagement - Spotify is leveraging artificial intelligence to enhance user engagement through features like AI DJ and AI Playlist, which personalize content for users [4][5] - The company is also expanding its content offerings in the podcasting and audiobook markets, with over 375,000 audiobook titles, ranking second behind Amazon's Audible [6]