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Spotify (SPOT) Gains But Lags Market: What You Should Know

Zacks Equity Research
·2 mins read

Spotify (SPOT) closed the most recent trading day at $241.01, moving +0.7% from the previous trading session. This move lagged the S&P 500's daily gain of 1.05%. At the same time, the Dow added 0.52%, and the tech-heavy Nasdaq gained 1.72%.

Heading into today, shares of the music-streaming service operator had lost 11.07% over the past month, lagging the Business Services sector's loss of 2.11% and the S&P 500's loss of 3.29% in that time.

Wall Street will be looking for positivity from SPOT as it approaches its next earnings report date. On that day, SPOT is projected to report earnings of -$0.67 per share, which would represent a year-over-year decline of 263.41%. Our most recent consensus estimate is calling for quarterly revenue of $2.34 billion, up 18.85% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of -$3.66 per share and revenue of $9.28 billion. These totals would mark changes of -218.26% and +22.01%, respectively, from last year.

Any recent changes to analyst estimates for SPOT should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 2.36% lower. SPOT currently has a Zacks Rank of #4 (Sell).

The Technology Services industry is part of the Business Services sector. This industry currently has a Zacks Industry Rank of 162, which puts it in the bottom 37% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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