Company Overview - Spotify Technology S.A. (NYSE:SPOT) is a global audio streaming company with over 600 million monthly active users, making it the largest music streaming service by market share [4] Investment Ratings - Benjamin Swinburne from Morgan Stanley reiterated a Buy rating on Spotify but lowered the price target from $800 to $775 [1] - Matthew Condon from Citizen JPM initiated coverage with a Buy rating and a price target of $800 [1] Industry Outlook - The Media and Entertainment sector is expected to enter 2026 strongly, supported by solid fundamentals and momentum [2] - Companies insulated from AI disruptions are anticipated to perform the best, benefiting from increased demand for premium experiences [2] Company Strengths - Spotify's multi-vertical platform includes music, podcasts, video podcasts, and audiobooks, which is seen as a key driver for revenue and free cash flow growth [3] - The platform is recognized for ongoing product innovation, advanced personalization, and broad accessibility across devices, supporting sustained user growth and providing a significant pricing edge [3]

Core Insights - Spotify Technology S.A. has been identified as a must-buy stock following a price target increase from Cantor Fitzgerald, reflecting strong Q3 performance [1][2] Financial Performance - Spotify reported Q3 2025 revenue of €4.3 billion, exceeding consensus by 1%, and operating income of €582 million, outperforming expectations by 16% [1] - The company’s gross margin improved to 31.6%, surpassing guidance by 50 basis points, with a forecasted Q4 revenue of €4.5 billion, slightly below the €4.6 billion estimate [2] - Annual revenue for Spotify is nearing $19.8 billion, with a gross profit margin of 31.85% [2] Subscriber Growth - The subscriber count increased by 12% year-over-year to 281 million, while Monthly Active Users reached 713 million, up 11% [1] Market Position and Strategy - Spotify is recognized as a leading global audio streaming platform, primarily generating revenue through paid subscriptions, advertising, and strategic partnerships [4] - The company is gaining traction in podcasts and audiobooks, and is integrating AI features, which may support future price increases and margin expansion [3] Future Projections - For FY26, revenue estimates were slightly reduced by 1%, but EBIT projections increased by 7%, with a new price target based on a blended 35x multiple of FY26/27 EBIT [3]