Spotify Stock Rocks Higher As Music Streamer Gets Price-Target Hikes

Spotify Technology (SPOT) stock has been on a roll, surging more than 8% in after-hours trading following the company's strong Q3 earnings report. The music streaming giant reported record net income, operating income, and gross margin, as well as significant subscriber and user growth. This positive performance has led several Wall Street analysts to raise their price targets on the stock, reflecting their confidence in Spotify's growth potential.



Deutsche Bank analyst Benjamin Black raised his price target on Spotify stock to $535 from $500, citing the company's durable top-line growth and inflecting margins. He noted the positive impact of subscription price increases and a possible new superpremium service coming. UBS analyst Batya Levi raised her price target on Spotify stock to $540 from $485, stating that she remains bullish on Spotify shares in 2025. She expects Spotify's momentum to continue this year, supported by subscription adds and product enhancements. JPMorgan analyst Doug Anmuth raised the firm's price target on Spotify to $555 from $530, keeping an Overweight rating on the shares. He expects artificial intelligence to continue to dominate the investment narrative, with Spotify being one of the top picks for 2025.

Spotify's strong Q3 results and positive outlook have analysts bullish on the stock's prospects. The company added 6 million paying subscribers globally in Q3, bringing the total to 252 million. Revenue grew by 19% year-over-year (YoY) to €4.0 billion, while net income reached €300 million, up more than fourfold from the previous year. Gross margin also improved to 31.1% versus 26.4% in the year-earlier period. Spotify gained 14 million total monthly active users (free and paid) to stand at 640 million at the end of Q3. The company expects to add 8 million Premium subscribers and 25 million total monthly active users in Q4, with total revenue of €4.1 billion and operating income of €481 million.



Spotify's expansion into video and new features, such as music videos in beta in 85 new markets and comments for podcasts, has also contributed to the stock's recent surge. The company's focus on long-term objectives over short-term profitability has allowed it to invest in growth and maintain market share. Spotify's price increases and improved monetization strategies have also helped drive revenue growth and margin expansion.



In conclusion, Spotify's strong Q3 results, positive outlook, and analyst price-target hikes reflect the company's robust growth potential. With a focus on innovation, expansion, and monetization, Spotify is well-positioned to continue its upward trajectory in the music streaming market. As the company continues to invest in growth and adapt to changing market dynamics, investors can expect more positive developments from the music streaming giant.