Can SPOT maintain its EPS growth trend into next year?

Spotify's EPS growth trend appears promising for the near future, considering the following points:

1. Consistent Revenue Growth: Spotify has demonstrated robust revenue growth, with a 18.52% increase over the last twelve months. Analysts forecast annual increases between 13% and 17% from 2023 to 2026. This consistent growth trajectory suggests a strong business model and market demand.

2. Margin Improvements: The company's operating margin is projected to increase from -3.0% to 8.4% over the same period. Gross margin improved by 555 bps to 32.2%, indicating better cost management and profitability.
3. Subscriber Growth: Spotify has seen significant growth in its subscriber base, with 10 million premium subscribers added in the December quarter, surpassing expectations. Premium subscribers grew 11% year-over-year to 263 million.
4. Price Increase Potential: Spotify has successfully raised prices across its worldwide markets, reflecting the value proposition from new features and expansion into formats like podcasts and audiobooks. The average revenue per user (ARPU) is up 11% year over year on a constant currency basis.
5. Financial Health: Spotify holds more cash than debt on its balance sheet, and its cash flows sufficiently cover interest payments, demonstrating solid financial health. The company's return on capital employed is expected to improve from -5.2% in 2023 to 24.9% in 2024.
6. Strategic Partnerships: The company's strategic alliance with Warner Music Group is expected to strengthen commitments to artists and fans, potentially boosting investor confidence. Integration of Spotify with Opera has expanded its reach, enhancing user engagement and brand visibility.
7. Analyst Optimism: Analysts maintain a bullish consensus with price targets ranging from $442 to $759, indicating confidence in Spotify's growth potential.

However, it's important to note that Spotify faces challenges, such as competitive pressures in developing markets and late transition to programmatic advertising. The company's ability to navigate these challenges and maintain its EPS growth trend will depend on its continued innovation, market adaptation, and strategic partnerships.