Spotify (SPOT) stock has received a moderate buy rating from analysts, on average. Here’s the latest.
SPOT stock has shown a recovery uptrend over the past three quarters. The stock hit its 52-week low of $69.29 per share in November 2022 and has since surged 123% to over $159 per share. Analysts attribute the rebound to improving company fundamentals as well as an industry-wide rally driven by artificial intelligence.
Analysts believe that AI will play a major role in Spotify’s future performance thanks to the massive amounts of data the company is collecting. As a consumer-facing application of AI technology, an AI DJ is already being experimented with, giving the “feel” of a morning DJ on a commute or morning workout.
The upcoming Spotify HiFi tier has also raised hopes that Spotify will have a new revenue stream. Two years after Spotify HiFi was announced, the company is ready to talk about its new “Supremium” membership tier. Spotify Supremium offers lossless audio streaming and can also include audiobook credits, similar to competitor Amazon’s Audible service.
Spotify’s monthly active users grew to 515 million in the first quarter of 2023, a compound annual growth rate of 22%. 210 million of those are Spotify Premium subscribers, who pay $9.99 a month for ad-free listening. Spotify management expects monthly active users to grow to 530 million people and 217 million premium subscribers.
Have seven analysts rated SPOT stock has a rating of “Hold,” while Fifteen have given a “Buy” rating to the company. Hedge funds and institutional investors have taken new positions in SPOT, including SRS Investment Management LLC, Norges Bank, Wellington Management Group LLP, Technology Crossover Management XI Ltd. and Alecta Tjanstepension Omsesidigt, all of whom have increased their stakes in the audio streaming company based on the company’s performance this year. The reorganization of its podcast division has been instrumental in the recovery as Daniel Ek admits Spotify has overplayed its acquisition of exclusive content.