Spotify Stock (NYSE: SPOT) Cracks Another Record High — And Some Analysts Are Banking on Even More Growth
Spotify stock (NYSE: SPOT) has officially hit yet another all-time high – raising questions about its potential upside through the remainder of 2024 and into the new year.
That record price, $371.11 per share, is just the latest in a line of positives for SPOT. Even at its current roughly $370 price point, the stock has almost doubled its value since the year’s start. Of course, though it perhaps goes without saying, newly reduced rates are contributing to the current surge.
But said rates aren’t solely responsible for the months-in-the-making ascent – or many investors’ decidedly bullish SPOT ratings and target prices. Despite shares’ having climbed by nearly 138 percent from late September of 2023, for a present market cap of around $75 billion, several financial professionals are of the belief that there’s still room to grow.
We recapped a portion of the appropriate forecasts earlier in September, but the number of bullish SPOT positions has spiked in the interim. As things stand, Bank of America has settled on a $380 target, against $400 for UBS, $425 for Goldman Sachs, $440 for KeyCorp, and a whopping $510 for Pivotal Research.
The shorter list of less enthusiastic SPOT assessments consists of forecasts from Seeking Alpha’s Gary Alexander and more recently Cantor Fitzgerald. However, even the latter’s $340 target, while well beneath Spotify stock’s current value, represents a material boost from the approximately $188 price point SPOT was commanding at the top of 2024.
The contrasting positions are intriguing with regard to where SPOT goes from here – whether that’s an apparent decline (like that anticipated by Cantor Fitzgerald) or a staggering $140-per-share increase (as expected by Pivotal Research).
Lacking a crystal ball, we can’t tell exactly what the future holds for Spotify and its stock. But it should be reiterated that the platform’s 2024 market gains have arrived in tandem with an enhanced focus on profitability and operational efficiency. Consequently, the bullish SPOT forecasts mentioned above are presumably banking on the company remaining in the black.
Though net earnings are easier to plot out given the subscription-based business model and serious belt-tightening efforts at hand, user and subscriber additions are harder to predict. Evidently more focused on Spotify’s total subscribers (which exceeded guidance at 246 million for Q2), Wall Street seemingly took little notice of the company’s second-quarter MAUs miss (626 million versus 631 million forecasted).
Stated concisely, it’ll be interesting on multiple levels to see how Spotify’s users and subscriptions fare during Q3. Also important are the results associated with enhanced monetization efforts. As spelled out by stateside data and the majors’ earnings reports, much of Spotify’s subscriber growth is deriving from emerging markets where on-demand music access costs comparatively little.
And while that’s not the company’s only incentive to continue expanding, it’s definitely worth keeping front of mind amid an audiobook push, a growing emphasis on advertising, an ongoing AI buildout, and rumblings of a video embrace.
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