JP Morgan Reduces Price Target on Spotify (SPOT) to $700
Spotify Technology S.A. (NYSE:SPOT) is one of the 13 High-Risk High-Reward Growth Stocks to Invest In.
On February 11, JPMorgan trimmed its target price on Spotify by 13.0% to $700 from $805, while retaining an Overweight call on the stock. The firm thinks that SPOT’s recent subscription price increases will mitigate the impact of rising royalty costs in 2026. It also believes that investor sentiment regarding AI’s impact on Spotify is overdone.
This target price update comes a day after Spotify released its Q4 2025 earnings report on February 10. The results showed above-guidance user growth, with total monthly active users (MAUs) growing 11% YoY to 751 million (vs. 745 million guidance) and premium subscribers growing 10% YoY to 290 million (vs. 289 million guidance). This user growth translated into 6% YoY revenue growth, with total revenue reaching €4.5 billion (vs. €4.5 billion guidance). Premium subscriptions drove this growth, growing 8% YoY to €4.0 billion and offsetting the drag from Ad-supported revenue, which fell 4% YoY to €0.5 billion.
As for profitability, gross profit growth outpaced revenue growth at 10% YoY to €1.50 billion (from €1.35 billion), thanks to a 90-basis-point improvement in gross margins YoY (150-basis points QoQ) to 33.1%. Operating profit followed a similar trend, growing 47% YoY to €0.70 billion (from €0.58 billion) due to a 430-basis-point expansion in operating margins (190-basis points QoQ) to 15.5%.
Spotify’s management also presented its outlook for the 1
Spotify Technology S.A. (NYSE:SPOT) is a leading digital music streaming platform. The company is based in Luxembourg and was founded in December 2006 by Daniel Ek and Martin Lorentzon.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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