Spotify has little investment appeal because it competes against Apple Music, Amazon Music and YouTube Music. Putting an entire investment into a pure music-streaming company is hard to justify. x.com 

Spotify fell 12% despite beating on EPS and users because the market is pricing slowing growth against a rich multiple. Guidance disappointed, and at 60x+ earnings, in-line revenue of $5.3B is a miss in disguise. MAU growth is slowing, so 761 million users looks like a forming ceiling rather than a path to 1 billion, and the margin expansion and media-company stories need to show up in the numbers. The open question is at what price it becomes interesting again. x.com  x.com 

Netflix and Spotify are getting extremely interesting after falling 50% and 40% from their highs, because both run the same proprietary-data flywheel. Each new subscriber's data improves recommendations, product value and pricing power, attracting more subscribers. The bigger opportunity is cross-selling new, higher-margin verticals to hundreds of millions of paying subscribers without reacquiring them. Netflix is below its 200-week moving average; Spotify needs another ~15% drop to get there. … Show more

Spotify's growth is falling short of what the market wants, even as it becomes a free cash flow machine. Its latest results were OK and mostly beat guidance, but users rose only 1% quarter on quarter and advertising revenue dropped 25%; the stock fell 11% pre-market. Margin gains and expense control have produced operating leverage, but without faster revenue growth or better margins the stock could be stuck for a while. x.com 

Spotify looks expensive on valuation levels alone, at $497.51 against an estimated fair range of $268.30 to $341.48, about 46% above the top of fair value. It trades at 28.4x forward earnings, a 1.44 PEG and 4.8x EV/sales. The read uses reported earnings and revenue estimates only, with no fundamental work. x.com 

Spotify has entered the sweet spot of the business growth cycle: newly profitable, it can now allocate capital more efficiently and expand margins. In 2024, after cost cuts and with low investment needs, it posted its first full year of profitability, an 8.7% operating margin and $2.5B in free cash flow. With 675 million monthly users and 263 million paying subscribers, it is the largest music streamer, over twice Apple Music, YouTube Music or Amazon Music, a profitable oligopoly leader. x.com 

Spotify should trade down toward $400 on the numbers alone after a pretty bad print. Both Spotify and Netflix are hitting saturation and need new levers to keep raising prices. Spotify's price catch-up is flowing through, but its AI product probably won't show up in the model until 2027, and management's AI roadmap answer was word salad. Without positive revisions or needle-moving AI news, defenders mostly look like investors starved for long ideas outside AI infrastructure. x.com  x.com  x.com  … Show more

Spotify's premium multiple doesn't fit single-digit reported growth, which is why a clean Q1 beat still sent the stock lower. At about 40x trailing and 32x forward earnings, the bar was a blowout: revenue grew 8% reported to €4.53B, while a record 33% gross margin, €715M operating income and 761M MAUs all beat guidance. Alphabet, Uber and Meta trade at 22-24x forward while growing faster. Spotify is a great business with pricing power, but premium multiples on single-digit growth get re-rated. … Show more

Spotify's price hikes and scale keep widening margins despite a 42% fall in reported net income. Q3 revenue rose 16%, gross profit 21% and operating income 15%; the bottom-line decline reflects last year's €245M finance gain and tax benefit versus €33M finance income and a €187M tax expense this year. Grade: B. x.com 

Spotify's lack of song comments for years leaves it with little information about what listeners thought or felt during particular songs and genres. That weakens its position if it now wants to generate AI music on the fly for users' moments. x.com