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

Zacks Equity Research
·2 min read

Spotify (SPOT) closed the most recent trading day at $314.24, moving +0.17% from the previous trading session. This move lagged the S&P 500's daily gain of 0.57%. Elsewhere, the Dow gained 1.44%, while the tech-heavy Nasdaq lost 0.61%.

Coming into today, shares of the music-streaming service operator had lost 5.75% in the past month. In that same time, the Business Services sector gained 0.21%, while the S&P 500 gained 0.83%.

SPOT will be looking to display strength as it nears its next earnings release, which is expected to be February 3, 2021. On that day, SPOT is projected to report earnings of -$0.76 per share, which would represent year-over-year growth of 39.68%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.53 billion, up 23.17% from the year-ago period.

Investors should also note any recent changes to analyst estimates for SPOT. These recent revisions tend to reflect the evolving nature of short-term business trends. 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.

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. Within the past 30 days, our consensus EPS projection has moved 2% higher. 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 177, which puts it in the bottom 31% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. 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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