Spotify Technology SPOT, a current Zacks Rank #1 (Strong Buy), provides a music streaming platform that includes commercial-free music and ad-supported services to subscribers. Analysts have taken their earnings expectations higher across the board.
Image Source: Zacks Investment Research
In addition to favorable earnings estimate revisions, the stock resides in the Zacks Technology Services industry, currently ranked in the top 25% of all Zacks industries. Let’s take a closer look at how the company currently stacks up.
Spotify
Spotify’s set of quarterly results came in well above expectations, beating our Zacks Consensus EPS estimate by a sizable 32%. The company’s growth has continued to be stellar, with EPS growing 185% and sales posting 19% growth relative to the year-ago periods.
The company posted record profitability, aided by healthy subscriber gains and improved monetization. Monthly Active Users (MAUs) grew 14% year-over-year, whereas Premium Subscribers saw 12% growth from the year-ago period.
In addition, the company enjoyed margin expansion throughout the period, seeing its gross margin finish at a record high of 29.2%. Please note that the margin chart below is on a trailing twelve-month basis.
Image Source: Zacks Investment Research
Shares are expensive, reflective of investors’ high growth expectations. Still, investors are paying a fair price for the forecasted growth, reflected by the current 0.6X PEG Ratio.
Bottom Line
Investors can implement a stellar strategy to find expected winners by taking advantage of the Zacks Rank – one of the most powerful market tools that provides a massive edge.
The top 5% of all stocks receive the highly coveted Zacks Rank #1 (Strong Buy). These stocks should outperform the market more than any other rank.
Spotify Technology SPOT would be an excellent stock for investors to consider, as displayed by its Zack Rank #1 (Strong Buy).
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
