Spotify Technology (NYSE:SPOT) Shares Gap Up – Still a Buy?

Spotify Technology (NYSE:SPOT)’s stock price gapped up prior to trading on Thursday. The stock had previously closed at $525.34, but opened at $561.29. Spotify Technology shares last traded at $569.2410, with a volume of 1,022,722 shares trading hands.

Spotify Technology News Roundup

Here are the key news stories impacting Spotify Technology this week:

• Positive Sentiment: Premium subscriber growth beat expectations. Spotify added more paying users than previously forecast, supporting recurring revenue and helping drive optimism around the company’s ability to monetize its expanding user base. Spotify Turns Up Volume On Paying Users, Beats Estimates
• Positive Sentiment: Revenue grew substantially and fourth-quarter guidance was encouraging. Third-quarter revenue was approximately $5.63 billion, up 16.3% year over year, while management forecast fourth-quarter profit above analyst expectations. The company attributed momentum in part to AI-powered personalization and product improvements. Spotify forecasts fourth-quarter profit above estimates on AI bets
• Positive Sentiment: Investors see additional AI and monetization opportunities. Coverage cited AI-enhanced recommendations, potential new AI products, premium pricing gains, paid podcast memberships and improving advertising as possible longer-term growth catalysts. Jefferies also raised its price target to $620 and maintained a Buy rating. Spotify Stock Is Lagging This Year, but Jefferies Sees Its Platform as Highly Defensible Against AI
• Positive Sentiment: Institutional demand provided an additional supportive signal. ETFs purchased approximately $80.4 million of Spotify shares on October 20, suggesting continued passive and institutional interest. ETFs Bought $80.4 Million of Spotify
• Neutral Sentiment: Spotify launched a native car app for Audi and Android Automotive vehicles, potentially improving engagement and convenience, though the near-term financial effect is uncertain. Spotify Launches Native Car App
• Negative Sentiment: Quarterly earnings missed analyst estimates. Reported EPS was about $2.81–$2.85 versus consensus near $3.10–$3.18. Revenue also came in slightly below expectations, creating a potential headwind despite strong year-over-year growth. Spotify Q3 Earnings Miss Estimates
• Negative Sentiment: Advertising remains a concern, and Spotify’s valuation leaves less room for execution errors. The company’s P/E ratio is about 32.8, while analysts continue to monitor whether premium growth, pricing and AI investments can offset advertising pressure and elevated expectations.

Wall Street Analysts Forecast Growth

A number of equities research analysts have issued reports on the company. Benchmark reduced their price target on Spotify Technology from $695.00 to $650.00 and set a “buy” rating on the stock in a research report on Wednesday, July 22nd. Rosenblatt Securities reissued a “neutral” rating and set a $527.00 price objective on shares of Spotify Technology in a research report on Tuesday. Piper Sandler started coverage on shares of Spotify Technology in a research note on Thursday, October 8th. They set a “neutral” rating and a $540.00 target price on the stock. Wall Street Zen lowered shares of Spotify Technology from a “buy” rating to a “hold” rating in a research note on Saturday, July 25th. Finally, Wells Fargo & Company reduced their price objective on shares of Spotify Technology from $600.00 to $570.00 and set an “overweight” rating on the stock in a report on Thursday, July 9th. One equities research analyst has rated the stock with a Strong Buy rating, twenty-three have issued a Buy rating and eight have given a Hold rating to the stock. According to MarketBeat, the company presently has a consensus rating of “Moderate Buy” and a consensus target price of $610.25.

Spotify Technology Stock Up 8.2%

The business’s fifty day simple moving average is $523.52 and its two-hundred day simple moving average is $496.61. The company has a market cap of $116.97 billion, a price-to-earnings ratio of 35.28, a PEG ratio of 1.63 and a beta of 1.61.

Spotify Technology (NYSE:SPOT) last issued its quarterly earnings data on Tuesday, August 4th. The company reported $3.03 earnings per share for the quarter, missing the consensus estimate of $3.16 by ($0.13). Spotify Technology had a return on equity of 41.39% and a net margin of 18.44%. The company had revenue of $5.45 billion for the quarter, compared to analysts’ expectations of $5.47 billion. During the same quarter in the prior year, the firm posted ($0.42) EPS. The firm’s quarterly revenue was up 13.9% compared to the same quarter last year. Sell-side analysts predict that Spotify Technology will post 13.66 EPS for the current fiscal year.

Insider Buying and Selling at Spotify Technology

In other Spotify Technology news, CEO Alex Norström sold 5,436 shares of the company’s stock in a transaction on Monday, August 3rd. The shares were sold at an average price of $502.10, for a total value of $2,729,415.60. Following the completion of the transaction, the chief executive officer owned 66,773 shares in the company, valued at $33,526,723.30. This represents a 7.53% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is available at this hyperlink. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, CEO Gustav Söderström sold 20,910 shares of the company’s stock in a transaction on Monday, October 12th. The shares were sold at an average price of $530.13, for a total transaction of $11,085,018.30. Following the completion of the transaction, the chief executive officer owned 19,908 shares of the company’s stock, valued at $10,553,828.04. This represents a 51.23% decrease in their position. The disclosure for this sale is available in the SEC filing. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders have sold a total of 68,092 shares of company stock worth $35,762,410 over the last quarter. 0.40% of the stock is owned by company insiders.

Institutional Trading of Spotify Technology

A number of hedge funds and other institutional investors have recently made changes to their positions in the company. Janus Henderson Group PLC lifted its holdings in shares of Spotify Technology by 20.1% in the 1st quarter. Janus Henderson Group PLC now owns 1,711,015 shares of the company’s stock valued at $829,641,000 after purchasing an additional 286,844 shares during the last quarter. Tiger Global Management LLC boosted its position in shares of Spotify Technology by 25.3% in the 1st quarter. Tiger Global Management LLC now owns 1,580,761 shares of the company’s stock valued at $766,527,000 after purchasing an additional 319,300 shares during the period. Amundi boosted its position in shares of Spotify Technology by 20.0% in the 1st quarter. Amundi now owns 1,104,484 shares of the company’s stock valued at $535,575,000 after purchasing an additional 183,994 shares during the period. Principal Financial Group Inc. boosted its position in shares of Spotify Technology by 53.4% in the 1st quarter. Principal Financial Group Inc. now owns 989,667 shares of the company’s stock valued at $479,899,000 after purchasing an additional 344,471 shares during the period. Finally, Sei Investments Co. grew its stake in Spotify Technology by 1.8% during the 1st quarter. Sei Investments Co. now owns 749,495 shares of the company’s stock worth $363,415,000 after buying an additional 13,381 shares during the last quarter. Institutional investors and hedge funds own 84.09% of the company’s stock.

About Spotify Technology

Spotify Technology SA is an audio streaming company that operates the Spotify platform, offering users access to music, podcasts and audiobooks through internet-connected devices. Its catalog includes licensed recordings from music labels and artists, as well as podcasts and other audio content from creators and publishers.

Spotify provides both an ad-supported service and subscription-based Premium plans. Premium subscribers generally receive ad-free listening and additional features, while the advertising-supported service allows users to access content without a paid subscription.