Investors Heavily Search Spotify Technology (SPOT): Here is What You Need to Know

Core Viewpoint - Spotify's stock has shown a strong performance recently, returning +9.6% over the past month, outperforming the S&P 500 composite's +3.4% and the Zacks Technology Services industry's +1.9% [1] Earnings Estimates Revisions - For the current quarter, Spotify is expected to post earnings of $1.08 per share, reflecting a significant change of +163.9% from the same quarter last year, with the Zacks Consensus Estimate remaining unchanged over the last 30 days [4] - The consensus earnings estimate for the current fiscal year is $4.78, indicating a change of +262% from the prior year, also unchanged over the last 30 days [4] - For the next fiscal year, the consensus earnings estimate is $6.76, showing a change of +41.3% from the previous year, with no changes in the estimate over the past month [5] Revenue Growth Projections - The consensus sales estimate for the current quarter is $4.08 billion, indicating a year-over-year change of +17.9% [9] - For the current fiscal year, the revenue estimate is $16.73 billion, reflecting a change of +16.7%, while the next fiscal year's estimate of $19.15 billion indicates a change of +14.5% [9] Recent Performance and Surprise History - In the last reported quarter, Spotify achieved revenues of $3.95 billion, a year-over-year increase of +21%, and an EPS of $1.05 compared to -$1.24 a year ago [10] - The reported revenues exceeded the Zacks Consensus Estimate of $3.87 billion by +2.05%, with an EPS surprise of +66.67% [10] - Over the last four quarters, Spotify surpassed consensus EPS estimates twice and topped revenue estimates twice [11] Valuation Insights - Spotify is graded D in the Zacks Value Style Score, indicating it is trading at a premium compared to its peers [15] - The evaluation of valuation multiples such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF) is essential to determine if the stock is overvalued, fairly valued, or undervalued [13][14] Conclusion - The Zacks Rank 1 suggests that Spotify may outperform the broader market in the near term, despite its current premium valuation [16]