Spotify Technology (NYSE:SPOT) Stock Rating Cut to Strong Sell at Zacks Research

Spotify Technology (NYSE:SPOT) was downgraded by research analysts at Zacks Research from a “hold” rating to a “strong sell” rating in a report issued on Thursday, Zacks reports.

A number of other brokerages have also weighed in on SPOT. Guggenheim raised their price target on shares of Spotify Technology from $575.00 to $650.00 and gave the company a “buy” rating in a research note on Friday. JPMorgan Chase & Co. boosted their price objective on Spotify Technology from $650.00 to $700.00 and gave the stock an “overweight” rating in a research note on Friday. Piper Sandler reissued a “neutral” rating and set a $580.00 target price (up from $540.00) on shares of Spotify Technology in a report on Friday. Morgan Stanley raised their target price on Spotify Technology from $640.00 to $700.00 and gave the company an “overweight” rating in a research report on Friday. Finally, Benchmark lowered their price target on Spotify Technology from $695.00 to $650.00 and set a “buy” rating on the stock in a research note on Wednesday, July 22nd. One research analyst has rated the stock with a Strong Buy rating, twenty-three have assigned a Buy rating, nine have assigned a Hold rating and one has assigned a Sell rating to the company’s stock. According to data from MarketBeat.com, the stock currently has an average rating of “Moderate Buy” and a consensus price target of $620.07.

Spotify Technology Stock Up 0.0%

SPOT opened at $583.84 on Thursday. The company has a market cap of $120.20 billion, a price-to-earnings ratio of 38.72, a PEG ratio of 1.81 and a beta of 1.61. Spotify Technology has a 52-week low of $405.00 and a 52-week high of $676.67. The firm’s fifty day simple moving average is $526.60 and its two-hundred day simple moving average is $497.87.

Spotify Technology (NYSE:SPOT) last announced its earnings results on Tuesday, August 4th. The company reported $3.03 earnings per share (EPS) for the quarter, missing the consensus estimate of $3.16 by ($0.13). The company had revenue of $5.45 billion during the quarter, compared to analyst estimates of $5.47 billion. Spotify Technology had a net margin of 15.74% and a return on equity of 36.15%. The firm’s revenue for the quarter was up 13.9% compared to the same quarter last year. During the same quarter last year, the business earned ($0.42) EPS. On average, research analysts forecast that Spotify Technology will post 13.64 EPS for the current year.

Insider Buying and Selling

In related news, CEO Gustav Söderström sold 20,910 shares of the company’s stock in a transaction that occurred on Monday, October 12th. The stock was sold at an average price of $530.13, for a total value of $11,085,018.30. Following the transaction, the chief executive officer directly owned 19,908 shares in the company, valued at approximately $10,553,828.04. This represents a 51.23% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is accessible through this link. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, CEO Alex Norström sold 5,436 shares of the company’s stock in a transaction that occurred on Monday, August 3rd. The shares were sold at an average price of $502.10, for a total value of $2,729,415.60. Following the completion of the transaction, the chief executive officer owned 66,773 shares in the company, valued at $33,526,723.30. This represents a 7.53% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders have sold a total of 68,092 shares of company stock valued at $35,762,410 in the last 90 days. Insiders own 0.40% of the company’s stock.

Institutional Investors Weigh In On Spotify Technology

Hedge funds and other institutional investors have recently added to or reduced their stakes in the business. Cantillon Capital Management LLC acquired a new position in shares of Spotify Technology in the 1st quarter valued at $213,047,000. Southpoint Capital Advisors LP acquired a new stake in shares of Spotify Technology during the 1st quarter worth about $193,964,000. Principal Financial Group Inc. increased its position in shares of Spotify Technology by 53.4% during the 1st quarter. Principal Financial Group Inc. now owns 989,667 shares of the company’s stock worth $479,899,000 after purchasing an additional 344,471 shares during the last quarter. Tiger Global Management LLC boosted its stake in Spotify Technology by 25.3% during the first quarter. Tiger Global Management LLC now owns 1,580,761 shares of the company’s stock worth $766,527,000 after buying an additional 319,300 shares during the period. Finally, Janus Henderson Group PLC boosted its stake in Spotify Technology by 20.1% during the first quarter. Janus Henderson Group PLC now owns 1,711,015 shares of the company’s stock worth $829,641,000 after buying an additional 286,844 shares during the period. Institutional investors and hedge funds own 84.09% of the company’s stock.

Spotify Technology News Roundup

Here are the key news stories impacting Spotify Technology this week:

• Positive Sentiment: Spotify reported 306 million premium subscribers in the third quarter, up 9% year over year and 1 million above its guidance. Monthly active users rose 11% to 788 million, with growth across all regions. Spotify Stock Jumps as Subscriber Growth Beats Expectations
• Positive Sentiment: Revenue increased roughly 16% year over year to about €4.97 billion, while gross margin expanded 140 basis points to 33% and operating income exceeded company guidance. Spotify expects fourth-quarter operating profit above Wall Street expectations and projects revenue of approximately €6.0 billion. Spotify forecasts fourth-quarter profit above estimates on AI bets
• Positive Sentiment: Management highlighted AI-powered personalization, including its “taste model,” as a way to increase listening, reduce churn and support pricing power. It also expects moderating expenses and continued margin expansion, with long-term targets of more than 20% operating margin and 35%–40% gross margin by 2030. Spotify Soars After Earnings as the Company Touts AI Benefits and Moderating Costs
• Positive Sentiment: Several analysts raised their targets following the results. Morgan Stanley and JPMorgan lifted targets to $700 with overweight ratings, while Wells Fargo, Barclays, Oppenheimer and Guggenheim also raised targets to $650–$660. Spotify Analysts Raise Their Forecasts Following Q3 Earnings
• Neutral Sentiment: Spotify’s headline results were mixed: quarterly EPS of roughly $2.78–$2.85 missed consensus near $3.10–$3.18, while revenue was slightly below estimates. Piper Sandler maintained a neutral rating with a $580 target, and Cantor Fitzgerald maintained neutral at $550.
• Negative Sentiment: TD Cowen reaffirmed a hold rating with a $525 price target, and some newly raised targets remain below the current market valuation, signaling concerns that much of the subscriber and AI optimism may already be reflected in SPOT shares.

About Spotify Technology

Spotify Technology SA is an audio streaming company that operates the Spotify platform, offering users access to music, podcasts and audiobooks through internet-connected devices. Its catalog includes licensed recordings from music labels and artists, as well as podcasts and other audio content from creators and publishers.

Spotify provides both an ad-supported service and subscription-based Premium plans. Premium subscribers generally receive ad-free listening and additional features, while the advertising-supported service allows users to access content without a paid subscription.