Market Overview

Spotify's Value To Consumers Earns It A Bullish Rating From Stifel

Share:
Spotify's Value To Consumers Earns It A Bullish Rating From Stifel

Spotify Technology S.A. (NYSE: SPOT) stock traded on a public market for the first time Tuesday, and Stifel sees three reasons why investors should be buyers.

The Analyst

Stifel's John Egbert initiated coverage of Spotify's stock with a Buy rating and $180 price target.

The Thesis

Spotify is the largest streaming music provider by multiple metrics, and the case for buying the stock is threefold, Egbert said in the initiation note.

The company's unlimited and on-demand streaming platform for $9.99 a month one of the best deals on the internet on a value per dollar basis. This should help the company boost its membership from 160 million monthly active users as of the fourth quarter of 2017 to 300 million MAUs by 2021, 159 million of which are paying subscribers, Egbert said. 

Spotify has built a large platform despite facing competitive threats from some of the largest companies in the world, the analyst said. The company's competitive edge in the on-demand music streaming landscape will likely remain in place due to its  various points of distribution, differing user preferences, local market incumbents and technology-driven personalization and scale, Egbert said. 

Spotify's growth over the years needs to be accompanied with a path toward profitability, and this should occur by the end of the decade, the analyst said. Spotify will likely reach IFRS operating income profitability by 2020 and reach $1.23 billion in operating profit by 2024, with a longer-term operating margin profile of more than 11 percent, according to Stifel. 

Price Action

Shares of Spotify were trading higher by 5 percent premarket Thursday. 

Related Links:

Spotify Hits The Market In Unusual Debut

RBC Bullish On Spotify Ahead Of IPO, Sets $220 Price Target

Latest Ratings for SPOT

DateFirmActionFromTo
Oct 2019MaintainsBuy
Oct 2019MaintainsBuy
Oct 2019MaintainsHold

View More Analyst Ratings for SPOT
View the Latest Analyst Ratings

Posted-In: John Egbert Spotify MAU Stifel Streaming musicAnalyst Color Price Target Initiation Analyst Ratings Best of Benzinga

 

Related Articles (SPOT)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
BGNECLSADowngrades
SWKSMizuhoMaintains90.0
KEMB. Riley FBRDowngrades27.2
ROKGabelli & Co.Downgrades
SSRMB. Riley FBRUpgrades23.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com

4 Reasons Why Morgan Stanley Says A Change In Sales Tax Would Be 'Manageable' For Amazon

The Market In 5 Minutes: Ackman, Amazon, AMD And More