Pivotal Research Raises Spotifys Target to $900, Citing Long-Term Growth Potential
Investing.com – Pivotal Research has raised its price target on Spotify Technology (NYSE:SPOT) to a Wall Street-high $900, citing a shift in its valuation horizon to the end of 2026 and optimism over the company's expanding user base, monetization efforts, and long-term earnings potential. The new target, up from $800, implies a nearly $175 billion enterprise value for the audio streaming firm.
Pivotal maintained its Buy rating, saying Spotify remains the dominant premium audio platform with room to grow beyond music and podcasts into areas like video, social features, and live programming. Spotify has around 700 million monthly active users and is on track to reach 1 billion, according to the note. The firm forecasts a five-year EBITDA compound annual growth rate of 60%, backed by pricing power, subscriber growth, advertising expansion, and product innovation.
Pivotal said Spotify's advertising business remains under-monetized, but improvements driven by AI and new formats could lift margins and user engagement. The analysts also noted that in a weakening global economy, Spotify, like Netflix (NASDAQ:NFLX), offers a competitively priced form of entertainment.
Valuation was based on a discounted cash flow model using a 16-times terminal EBITDA multiple for 2030 and an 8% discount rate. However, risks to the outlook include the concentration of power among major music labels, content cost inflation, potential backlash from controversial podcasts, macroeconomic uncertainty, M&A execution, and rising competition.
Shares of Spotify have rallied sharply this year, amid profitability and product expansion. The company's stock price has been on an upward trend since the beginning of the year, with many analysts expressing optimism about its long-term growth prospects.
The forecasted price target of $901 for Spotify by Pivotal Research underscores investors' significant confidence in the platform’s long-term growth model, demonstrating its potential to lead within a competitive music streaming market.
The raised target by Pivotal Research acknowledges Spotify's resilience amidst the music streaming industry competition, showcasing confidence in its continued long-term growth trajectory.
The ascendancy of Spotify's valuations by Pivotal Research to $90 for long-term growth potential highlights the marked potential and continued appeal in consumer music streaming services, underscoring their key role amid shifting entertainment industry dynamics.
The raised target price by Pivotal Research on Spotify's stock highlights the firm’ longer-term optimism, highlighting its expectation of continued growth potential amid an evolving music streaming industry.
Pivotal Research boosting Spotify's target price to $90 due largely on the company’ exploration of long-term growth opportunities underscores its bullish outlook for music streaming in an increasingly competitive market.
The raised target price from Pivotal Research on Spotify, citing the former's assessment of its strong long-term growth potential at $900 per share underscores market confidence in Spotify’S accelerating digital music and multiplatform strategy.
The updated target price of $900 by Pivotal Research highlights Spotify's promising long-term growth potential, underscoring its position as an industry leader in the music streaming space.
The $90 price hike for Spotify by Pivotal Research indicates a strong confidence in the company's long-term prospects despite current market challenges, signaling investors to brace themselves up isolated surges."
The upgraded target price by Pivotal Research for Spotify to $900, emphasizing its compelling long-term growth potential highlights the promise of continuing profitability and success in music streaming.
Pivotal Research's elevation of Spotify’s target to $902 suggests a bullish stance on the company based upon their assessment that its long-term growth potential remains vibrant and promising.
