Spotify (SPOT) stock jumped more than 14% out of the gate Tuesday after the audio streaming and media company beat analysts' top- and bottom-line estimates for its first quarter.
In the three months ended March 31, SPOT reported year-over-year revenue growth of 19.5% to 3.6 billion euros thanks in part to recent price increases. The company also swung to a net profit of 97 euro cents per share vs a per-share loss of 1.16 euros in the year-ago period.
These results exceeded the consensus analyst estimate of 3.61 billion euros in revenue and earnings of 65 euro cents per share, according to CNBC.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Spotify also reported monthly active users (MAUs) of 615 million, representing an increase of 19.4% from the year-ago period and 2.2% from the prior quarter. Premium subscribers of 239 million were up 13.8% from the year-ago period and 1.3% from the prior quarter.
Spotify's premium subscribers result met its guidance for the quarter, but its MAUs result fell just shy of its guidance of 618 million.
"The business performed well in Q1, led by healthy subscriber gains, improved monetization and record strength in profitability," Spotify said in its earnings release. "Overall, we are encouraged by the strong start to the year and view the business as well positioned to deliver on the goals outlined at our 2022 Investor Day."
UBS sees more upside for Spotify
UBS Global Research analyst Batya Levi is bullish on the communication services stock, as evidenced by a Buy rating and a $375 price target, representing implied upside of nearly 19% to current levels.
"We expect SPOT to generate mid-teens revenue growth as subscriber momentum continues and price increases flow through," Levi wrote in an April 4 report. "We believe the company is on pace to show roughly 90 basis points of annual gross margin expansion, driven by stronger ad-supported margins and improvement in non-royalty expenses."
According to S&P Global Market Intelligence, the consensus analyst target price for Spotify stock is $270.04, which is about 12% below its current trading price. However, these estimates could be updated in the days and weeks ahead following the strong earnings results. Additionally, the consensus recommendation is Buy.
Related Content
-
Stocks Retreat as Shutdown Continues: Stock Market TodayWhile the main indexes closed lower today, Delta and PepsiCo gained ground on encouraging earnings reports.
-
Where There's a Will, There's a Way Your Assets Will Be Distributed as You WishYour will is the backbone of a strong, adaptable estate plan that ensures what you leave behind goes to your selected beneficiaries. Without a will, state laws determine who gets your assets.
-
I'm a Financial Adviser: This Is What You're Really Losing if You Cut Back on Your 401(k) ContributionsMissing out on the benefits of the employer match and compounding growth could force you to work longer and lower your standard of living in retirement. Here are some alternative options.
-
S&P 500 Hits New Highs as Rally Resumes: Stock Market TodayTech stocks were the biggest gainers on Wall Street today, with Nvidia and Dell making notable moves.
-
Should You Buy Gold as It Tops $4,000? Here's What the Experts SayRate cuts, a weak dollar and macro uncertainty have helped create a "perfect storm" for gold this year. Should investors add exposure or is it too late to buy?
-
Preferred Bank Stocks: The Investment Retirees (and Others) May Be Missing Out OnMost large banks issue preferred stocks that pay out fixed dividends, often with higher yields than bonds. Should you make room for them in your portfolio?
-
Don't Let Your Equity Compensation Trip You Up: A Financial Expert's GuideStock options, RSUs and other executive perks can come with some serious strings attached. To avoid a nasty tax surprise, you need a plan.
-
Rally Fades on Mixed AI Revolution News: Stock Market TodayAll three main U.S. equity indexes opened higher but closed lower as a seven-session winning streak for the S&P 500 came to an end.
