Spotify Technology S.A. Ordinary Shares (SPOT) Company Bio
Spotify AB provides a digital music-streaming service that gives on-demand access of songs on devices, computers, mobiles, tablets, and home entertainment systems. Its services allow subscribers to search and discover music collections of friends, artists, and celebrities; build a personal collection playlist; and share music on Spotify, Facebook, Twitter, blog, and via email with friends. It also offers research and development services in Sweden. The company was founded in 2008 and is based in Stockholm, Sweden. Spotify AB operates as a subsidiary of Spotify Limited.
SPOT Price Forecast Based on DCF Valuation
DCF Fair Value Target:
Below please find a table outlining a discounted cash flow forecast for SPOT, in which we model out valuation assuming a variety of terminal growth rates. To summarize, we found that Spotify Technology SA ranked in the 14th percentile in terms of potential gain offered. Our DCF analysis suggests the stock is overvalued by about 87.33%. In terms of the factors that were most noteworthy in this DCF analysis for SPOT, they are:
The stock's equity weight, or the proportion of capital from equity relative to debt, is 99. Its equity weight surpasses that of 87.47% of free cash flow generating stocks in the Technology sector.
The business' balance sheet suggests that 1% of the company's capital is sourced from debt; this is greater than just 6.94% of the free cash flow producing stocks we're observing.
Spotify Technology SA's interest coverage rate -- a measure of gross earnings relative to interest payments -- comes in at -0.41. This coverage rate is greater than that of just 23.67% of stocks we're observing for the purpose of forecasting via discounted cash flows.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
ANSS, EPAY, GLW, MXL, and SIMO can be thought of as valuation peers to SPOT, in the sense that they are in the Technology sector and have a similar price forecast based on DCF valuation.
Spotify Technology SA (NYSE: SPOT) is a Swedish audio streaming and media services provider. Shares of the company have gained around 100% over the past 12 months. According to a bullish investment thesis by Investing Canon, SPOT would be “one of the most compelling growth stories of this decade.” Continued geographic expansion and increased market […]
Spotify (SPOT) is sliding, now down 6.6% amid a report in The Information that Apple (AAPL -0.3%) is discussing a potential new subscription service that would charge customers for podcast listening. That marks a bigger move from Apple, which has been quietly expanding its efforts in the space over the...
The U.S. Justice Department's top antitrust official said on Friday the administration won't scrap decades-old agreements with music licensing groups ASCAP and BMI that hold down costs for Spotify and others. The department's review of the matter had been closely watched since scrapping the 1941 consent agreements could upend the business of licensing music to online companies like Spotify and Pandora as well as movie companies, commercials, bars and restaurants. Without the decrees, companies of any size seeking to play music would have to negotiate rights in a chaotic transition while also facing the prospect of price hikes, said the MIC Coalition, whose members include the Brewers Association and National Restaurant Association.
Spotify shares dropped Friday after Citi analysts downgraded the stock to sell from neutral on concern that the company's pivot to podcasts may not be working as well as investors hoped. The investment firm still values Spotify at €175 ($211.67) per premium subscription, but it is rolling that valuation forward to 2023 from 2022. "Among four subscription based stocks - Spotify, Roku, Netflix and SiriusXM - Spotify is the only firm where [Wall Street's] long-term forecasts (through 2023) do not comport to the prevailing valuation," Citi analyst Jason Bazinet said.