Spotify Shares Plunge 3.68% Amid Mixed Earnings and Analyst Target Revisions as $2.33 Billion Volume Slumps 38% to Rank 42nd in Market Activity

Spotify Technology (SPOT) declined 3.68% on July 31, with a trading volume of $2.33 billion, marking a 38.09% drop from the previous day’s volume and ranking 42nd in market activity. The stock’s performance followed mixed earnings results and analyst adjustments.

The company reported Q2 revenue of $4.56 billion, a 10% year-over-year increase, driven by 18 million new monthly active users (MAUs) and 8 million additional Premium Subscribers. However, earnings were negatively impacted by rising “social charges” linked to share-based compensation and foreign exchange pressures. Gross margins improved to 31.5%, but the diluted loss per share of $0.49 contrasted sharply with a $1.33 profit in the prior year. Analysts highlighted that while user growth exceeded expectations, the ad business remains underperforming, with 1% year-over-year revenue declines despite 5% growth in constant currency. CEO Daniel Ek acknowledged dissatisfaction with ad monetization progress, citing 2026 as a potential turning point for scaling this segment.

Analysts revised price targets for SPOT following the earnings report. KeyCorp reduced its target to $830 from $860, maintaining an “overweight” rating. Other firms, including UBS and JPMorgan, raised targets, reflecting a cautiously optimistic outlook. The stock’s 12-month average price target stands at $718.90, implying a 14.76% upside from its current level. Despite short-term volatility, long-term fundamentals remain intact, with free cash flow surging 43% and a 57% total return for 2025 through July 28.

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