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Stifel: What To Expect From Spotify's First Earnings Report As A Public Company

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Stifel: What To Expect From Spotify's First Earnings Report As A Public Company

Streaming music provider Spotify Technology SA (NYSE: SPOT) is scheduled to report its first-ever earnings as a public company after Wednesday's market close.

The Analyst

Stifel's John Egbert maintains a Buy rating on Spotify with an unchanged $180 price target.

The Thesis

Spotify is modeling to report the following metrics, Egbert said in a Tuesday note: 

  • 75 million premium subscribers.
  • Total monthly active users of 169.3 million.
  • Total revenue of $1.36 billion in the U.S. dollar equivalent. 
  • $317.6 million in gross profit. 
  • A 23.2-percent gross profit margin.
  • An operating loss of $87.5 million. 

Investors should pay attention to whether the following questions are answered during the earnings call, Egbert said: 

  • How will adding increased functionality for free users impact conversion to a paid subscription?
  • Does increased functionality for free users hurt or help gross margins given the ad-supported model?
  • Were there any notable subscriber trends per region in the quarter?
  • What impact to Spotify's business is being felt from increased competition?
  • Will bi-annual free trials grow in-line with gross subscriber additions?
  • When will average revenue per user headwinds ease?
  • What is the impact to Spotify's business from the acquisition of Loudr?
  • What is management's opinion on the Music Modernization Act?
  • Any commentary on Spotify's rumored in-car listening device? 

Price Action

Spotify shares were up about 1 percent at the time of publication Tuesday. 

Related Links:

Listen To The Music: Evercore Names 5 Reasons Why Spotify Is A Winner

Morgan Stanley Takes Bullish View On Spotify, Says User Base Could Reach 200M By 2022

Photo courtesy of Spotify. 

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 Loudr Music Music Modernization ActAnalyst Color Earnings News Analyst Ratings Best of Benzinga

 

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