Spotify (SPOT) stock jumped more than 14% out of the gate Tuesday after the audio streaming and media company beat analysts' top- and bottom-line estimates for its first quarter.
In the three months ended March 31, SPOT reported year-over-year revenue growth of 19.5% to 3.6 billion euros thanks in part to recent price increases. The company also swung to a net profit of 97 euro cents per share vs a per-share loss of 1.16 euros in the year-ago period.
These results exceeded the consensus analyst estimate of 3.61 billion euros in revenue and earnings of 65 euro cents per share, according to CNBC.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Spotify also reported monthly active users (MAUs) of 615 million, representing an increase of 19.4% from the year-ago period and 2.2% from the prior quarter. Premium subscribers of 239 million were up 13.8% from the year-ago period and 1.3% from the prior quarter.
Spotify's premium subscribers result met its guidance for the quarter, but its MAUs result fell just shy of its guidance of 618 million.
"The business performed well in Q1, led by healthy subscriber gains, improved monetization and record strength in profitability," Spotify said in its earnings release. "Overall, we are encouraged by the strong start to the year and view the business as well positioned to deliver on the goals outlined at our 2022 Investor Day."
UBS sees more upside for Spotify
UBS Global Research analyst Batya Levi is bullish on the communication services stock, as evidenced by a Buy rating and a $375 price target, representing implied upside of nearly 19% to current levels.
"We expect SPOT to generate mid-teens revenue growth as subscriber momentum continues and price increases flow through," Levi wrote in an April 4 report. "We believe the company is on pace to show roughly 90 basis points of annual gross margin expansion, driven by stronger ad-supported margins and improvement in non-royalty expenses."
According to S&P Global Market Intelligence, the consensus analyst target price for Spotify stock is $270.04, which is about 12% below its current trading price. However, these estimates could be updated in the days and weeks ahead following the strong earnings results. Additionally, the consensus recommendation is Buy.
Related Content
-
Starbucks 2025 Dress Code Changes: See the New LookThe 2025 Starbucks dress code change features a uniformed look as part of creating a more familar and friendly cafe experience.
-
Ray Dalio Is Ringing Alarm Bells About 'Something Worse Than a Recession'Bridgewater founder Ray Dalio has been sounding off about his concerns for the global economy as a result of tariffs and certain policies, as well as other factors.
-
Ray Dalio Is Ringing Alarm Bells About 'Something Worse Than a Recession'
Bridgewater founder Ray Dalio has been sounding off about his concerns for the global economy as a result of tariffs and certain policies, as well as other factors.
-
Should You Hire a Public Adjuster for Your Insurance Claim?As natural disasters strike more often, insurance clients are asking, 'What should I do, or who should I hire, if my insurance company is jerking me around?'
-
Tips to Help Entrepreneurs Create Self-Sustaining BusinessesWith the right processes and people in place, a truly sustainable business can be efficiently passed on to a successor and run profitably on its own.
-
Navigating Annuity Taxation: A Guide for Financial AdvisersUnderstanding the essentials of taxation in retirement income strategies involving annuities helps ensure positive outcomes for clients.
-
How Google Reviews Can Help (or Hurt) Financial AdvisersDon't leave your Google Business Profile unclaimed — someone else can make changes if they claim it. Also, here's what you can (and cannot) do with the reviews.
-
Stock Market Today: Stocks Gain on Tech, Auto Tariff TalkThe Trump administration said late Friday that it will temporarily halt tariffs on some Chinese tech imports.
-
What Is the Buffett Indicator?"It is better to be roughly right than precisely wrong," writes Carveth Read in "Logic: Deductive and Inductive." That's the premise of the Buffett Indicator.
-
10 Major AI Companies You Should KnowThese 10 AI companies are at the forefront of machine learning. Find out how they’re driving innovation and jostling to be the biggest players in the game.
