Spotify Technology Today
Spotify Technology
- 52 week interval
- $405.00
▼
$785.00
- The P/E ratio
- 38.96
- Target Value
- $655.92
Shares of the world's leading player in music streaming, Spotify Technology NYSE: SPOThe has been under a lot of pressure in the last 52 weeks. In June of last year, Spotify reached its all-time high, trading above $750. However, the stock has fallen sharply since then, now trading more than 30% below those highs.
During this period, growth has slowed down significantly, which has raised alarms about Spotify's valuation, which reached high levels in 2025. Spotify's latest earnings report didn't help, as shares rose more than 12% afterward.
However, the company recently held its first Investor Day in four years, where it revealed positive intentions as it tries to change the narrative surrounding its stock and focus on its North Star plans. After going through a rough patch, investors are buying.
Reversing Spotify's Story: Shares Take Big Hit as Growth Falls
The steep drop in Spotify shares came as a result of a combination of two factors: slowing growth and high multiples. Notably, in 2024, Spotify posted solid year-over-year revenue-neutral growth of 20% year-on-year (YOY), a steady pace from 16% YOY growth in 2023.
However, the company's growth rate started to decline in mid-2025. In Q2 2025, Spotify posted revenue-neutral growth of 15% YOY, but currency headwinds pushed reported growth to just 10% YOY. This was a significant drop from the 15% growth reported last quarter and was one of Spotify's lowest quarterly growth rates.
At the same time, Spotify was trading at a high price-to-earnings (P/E) ratio of more than 60x through 2025. This rate was inconsistent with low double-digit growth and declines, despite Spotify's strong position in the music streaming industry. Spotify's reported revenue increased less than 7% YOY in the last quarter of 2025, and revenue-neutral growth was 13% YOY. Overall, with a combination of cash headwinds and slowdowns, Spotify's growth has slowed significantly, with its forward P/E and stock price falling along the way.
Spotify was able to slightly accelerate its reported growth to 8.2% in Q1 2026 and neutral revenue growth to 14% YOY. The company also posted beats on the top and bottom lines. However, the stock fell 12% anyway, based on weak guidance and concerns about premium subscriber growth.
In this context, the company's Investor Day in May was a clear opportunity to gain market support, and it did just that.
Spotify Eyes Mid-Teens Growth, Big Margin Expansion on Road to North Stars
At its investor day, Spotify announced several key targets that got the market's attention, with shares rising 20% over the next two days. First, the company is aiming for neutral capital growth among young people by 2030.
Although the “mid-teens” are within the declining growth rates that Spotify recently set, investors still see it as a clear positive. Notably, this target indicates that Spotify does not expect the decline in its share-weighted growth to continue. Additionally, Spotify is a leader in the increasingly intrusive music streaming industry. As penetration increases, investors tend to naturally expect growth rates to decrease, as it becomes more difficult to acquire new customers. Therefore, Spotify's expectation that growth will at least remain stable for a long time shows resilience against entry concerns.
Spotify also expects to see significant margin expansion in 2030. The company aims for gross margins of between 35% and 40%. This represents a significant increase of between 300 and 800 points compared to its 2025 total of 32%. Meanwhile, Spotify projects an operating margin increase of more than 700 basis points, from about 13% in 2025 to more than 20% in 2030.
All this goes back to Spotify achieving its long-term “North Stars”: 1 billion subscribers, 100 billion in annual revenue, and a net profit of over 40%. Converting non-paying users into subscribers is one of the key steps the company aims to take to earn its North Stars.
The company notes that 71% of its subscribers use its free offering before converting to a premium offering. So, with more than 450 free users, the company can add more than 300 million premium subscribers over time if that number is 71%. This will result in the company doubling its current subscriber base of around 300 million to more than 600 million, putting it very close to its goal of 1 billion subscribers.
Analysts are pointing ahead after Spotify's investor day
Spotify Technology Stock Forecast Today
$655.92
34.17% changedBuy Medium
Based on 29 Analyst Ratings
| Current Price | $488.86 |
|---|---|
| High Forecast | $900.00 |
| Average prediction | $655.92 |
| Low Prognosis | $400.00 |
Spotify Technology Stock Forecast Details
Wall Street analysts also reacted favorably to Spotify's investor day, with MarketBeat tracking several price increases. By and large, analysts show strong support for Spotify's outlook. A MarketBeat consensus price of near $656 implies about a 35% upside for shares, while Spotify has zero Sell ratings, six Holds, and 23 Buys.
Even after the stock's recent rise, Spotify trades at a forward P/E of close to 33x, below its 51x estimate as of early 2025.
Overall, Spotify is showing strong confidence in its ability to continue to grow slowly and expand margins at a faster pace in pursuit of its North Stars. Meanwhile, the stock is trading meaningfully below previous levels, distorting Spotify's outlook to the upside.
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