In a report released today, Mark Zgutowicz from Rosenblatt Securities maintained a Buy rating on Spotify Technology SA (SPOT – Research Report), with a price target of $175. The company’s shares closed yesterday at $138.60.
“We are buyers of the stock here. Looks Reasonable. While SPOT faces NT gross margin headwinds from incremental podcast investment (‘19E $60M+) and increasing CRB rates, we believe ’19 and ’20 consensus adequately reflect these pressures. We expect a relatively neutral change to revenue share agreements with the Big Three record labels (Sony BMG, Group), made apparent on the 2Q call with a firmer ’19/’20 gross margin picture. SPOT’s leverage relative to the labels should not be understated given its (our est.) ~55% global paid subscriber share and subsequent ~20% contribution of Big Three company revenue. And important to note, SPOT can still drive gross margin leverage against an unchanged (neutral) rate card by growing thru minimum guarantees (MG), particularly in emerging markets.”
According to TipRanks.com, Zgutowicz is a 4-star analyst with an average return of 22.2% and a 59.5% success rate. Zgutowicz covers the Technology sector, focusing on stocks such as Trade Desk Inc, Pinterest Inc, and Wix.com Ltd.
Spotify Technology SA has an analyst consensus of Moderate Buy, with a price target consensus of $168.09.
The company has a one-year high of $198.99 and a one-year low of $103.29. Currently, Spotify Technology SA has an average volume of 1.48M.
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Spotify Technology SA is a digital music service offering music fans instant access to a world of music. The company enables on-demand streaming of audio content and aim to combat music piracy by offering a user experience, while monetizing licensed content with an ad-supported, free-to-the-user model and a premium, paid model.