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Spotify (SPOT) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research

In the latest trading session, Spotify (SPOT) closed at $146.74, marking a -1.5% move from the previous day. This move lagged the S&P 500's daily loss of 0.9%. Elsewhere, the Dow lost 0.58%, while the tech-heavy Nasdaq lost 0.93%.

Coming into today, shares of the music-streaming service operator had lost 2.33% in the past month. In that same time, the Business Services sector gained 4.3%, while the S&P 500 gained 3.3%.

Wall Street will be looking for positivity from SPOT as it approaches its next earnings report date. This is expected to be February 5, 2020. The company is expected to report EPS of -$0.48, down 217.07% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $2.09 billion, up 22.61% from the prior-year quarter.

Any recent changes to analyst estimates for SPOT should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. SPOT is currently a Zacks Rank #2 (Buy).

The Technology Services industry is part of the Business Services sector. This industry currently has a Zacks Industry Rank of 112, which puts it in the top 44% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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