Head-To-Head Review: Spotify Technology (SPOT) and The Competition

Spotify Technology (NYSE:SPOT) is one of 185 publicly-traded companies in the “Entertainment” industry, but how does it compare to its competitors? We will compare Spotify Technology to related companies based on the strength of its institutional ownership, valuation, profitability, analyst recommendations, risk, earnings and dividends.

Institutional & Insider Ownership

84.1% of Spotify Technology shares are held by institutional investors. Comparatively, 36.0% of shares of all “Entertainment” companies are held by institutional investors. 0.4% of Spotify Technology shares are held by insiders. Comparatively, 24.5% of shares of all “Entertainment” companies are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and target prices for Spotify Technology and its competitors, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Spotify Technology	1	9	23	0	2.67
Spotify Technology Competitors	1897	4558	9689	257	2.51

Spotify Technology currently has a consensus price target of $620.07, indicating a potential upside of 3.64%. As a group, “Entertainment” companies have a potential upside of 18.39%. Given Spotify Technology’s competitors higher probable upside, analysts clearly believe Spotify Technology has less favorable growth aspects than its competitors.

Valuation & Earnings

This table compares Spotify Technology and its competitors gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Spotify Technology	$19.44 billion	$2.50 billion	39.67
Spotify Technology Competitors	$4.05 billion	$67.95 million	2.60

Spotify Technology has higher revenue and earnings than its competitors. Spotify Technology is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Volatility & Risk

Spotify Technology has a beta of 1.49, indicating that its share price is 49% more volatile than the S&P 500. Comparatively, Spotify Technology’s competitors have a beta of 1.00, indicating that their average share price is 0% more volatile than the S&P 500.

Profitability

This table compares Spotify Technology and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Spotify Technology	15.74%	35.64%	21.23%
Spotify Technology Competitors	9.83%	-32.30%	-2.88%

Summary

Spotify Technology beats its competitors on 10 of the 13 factors compared.

About Spotify Technology

Spotify Technology operates a digital audio streaming platform offering music, podcasts and audiobooks. Listeners can use the service through a free, advertising-supported option or paid subscriptions, with features for discovering, organizing and sharing audio content. Founded in Sweden in 2006 by Daniel Ek and Martin Lorentzon, Spotify launched its streaming service in 2008. The company serves listeners and creators in markets around the world and provides tools and services for artists, podcasters, authors and other content partners.