Spotify (SPOT) Stock Sinks As Market Gains: What You Should Know

In the latest trading session, Spotify (SPOT) closed at $473.21, marking a -2.4% move from the previous day. The stock's change was less than the S&P 500's daily gain of 0.54%. Meanwhile, the Dow experienced a rise of 0.66%, and the technology-dominated Nasdaq saw an increase of 0.77%.

Heading into today, shares of the music-streaming service operator had gained 4.12% over the past month, outpacing the Computer and Technology sector's loss of 5% and the S&P 500's loss of 4.71%.

Analysts and investors alike will be keeping a close eye on the performance of Spotify in its upcoming earnings disclosure. In that report, analysts expect Spotify to post earnings of $3.68 per share. This would mark year-over-year growth of 225.66%. At the same time, our most recent consensus estimate is projecting a revenue of $5.37 billion, reflecting a 21.93% rise from the equivalent quarter last year.

SPOT's full-year Zacks Consensus Estimates are calling for earnings of $15.64 per share and revenue of $23.12 billion. These results would represent year-over-year changes of +31.54% and +18.98%, respectively.

Investors should also take note of any recent adjustments to analyst estimates for Spotify. Such recent modifications usually signify the changing landscape of near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-term stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, there's been a 0.19% fall in the Zacks Consensus EPS estimate. Spotify presently features a Zacks Rank of #3 (Hold).

Looking at valuation, Spotify is presently trading at a Forward P/E ratio of 31. This indicates a premium in contrast to its industry's Forward P/E of 18.85.

Also, we should mention that SPOT has a PEG ratio of 1.06. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The Internet - Software industry currently had an average PEG ratio of 1.05 as of yesterday's close.

The Internet - Software industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 159, this industry ranks in the bottom 36% of all industries, numbering over 250.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.

Radical New Technology Could Hand Investors Huge Gains

Quantum Computing is the next technological revolution, and it could be even more advanced than AI.

While some believed the technology was years away, it is already present and moving fast. Large hyperscalers, such as Microsoft, Google, Amazon, Oracle, and even Meta and Tesla, are scrambling to integrate quantum computing into their infrastructure.

Senior Stock Strategist Kevin Cook reveals 7 carefully selected stocks poised to dominate the quantum computing landscape in his report, Beyond AI: The Quantum Leap in Computing Power.

Kevin was among the early experts who recognized NVIDIA's enormous potential back in 2016. Now, he has keyed in on what could be "the next big thing" in quantum computing supremacy. Today, you have a rare chance to position your portfolio at the forefront of this opportunity.

See Top Quantum Stocks Now >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Spotify Technology (SPOT): Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research