Oppenheimer analyst Jason Helfstein maintained a Hold rating on Spotify Technology SA (SPOT) yesterday. The company’s shares closed yesterday at $135.45.
Helfstein noted:
“We are maintaining our Perform rating on SPOT following better 4Q results and ’19 sub guidance, but weaker gross margin guidance and a more aggressive pivot to podcasting. 4Q premium subs 1% above Street, adjusted gross margin 25.8% vs. Street’s 25.4%, while marketing/gross adds down y/y. Mgmt expects premium GM to stay at current level post label negotiations. Mgmt comments, margin guidance (GM 220/300 bps below Opco/Street) and several hundred mil. in acquisitions suggest more aggressive/faster move into podcasting. While 2020 margin overhang risk now gone, we see SPOT shares as fairly valued on 2020 EV/GP trading at 8.6x vs. peers at 8.4x, with comparable growth.”
According to TipRanks.com, Helfstein is a top 100 analyst with an average return of 17.2% and a 64.6% success rate. Helfstein covers the Technology sector, focusing on stocks such as ANGI Homeservices Inc, IAC/InterActiveCorp, and Alphabet Inc.
The word on The Street in general, suggests a Moderate Buy analyst consensus rating for Spotify Technology SA with a $170.56 average price target, which is a 25.9% upside from current levels. In a report released yesterday, Pivotal Research also reiterated a Hold rating on the stock with a $165 price target.
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Based on Spotify Technology SA’s latest earnings release for the quarter ending September 30, the company reported a quarterly net profit of $50.01 million. In comparison, last year the company had a GAAP net loss of $702 million.
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Spotify Technology SA is an innovative digital music service offering music fans instant access to a world of music. The company enables on-demand streaming of audio content and aim to combat music piracy by offering a user experience, while monetizing licensed content with both an ad-supported, free-to-the-user model and a premium, paid model.
