Spotify Stock Price Hits New All-Time High
Spotify reached an all-time high of $354.60 on the New York Stock Exchange on Friday, and closed at $353.48.
What recession? The leader in the fast-growing music streaming market, Spotify reached an all-time high of $354.60 on the New York Stock Exchange on Friday, and closed at $353.48, up 7% from Thursday’s closing price and up 12.2% for the week. At Friday’s high, Spotify’s enterprise value rose to roughly $66.1 billion.
Why the investor enthusiasm? An obvious factor is Bank of America Merrill Lynch analyst Jessica Reif Ehrlich’s price target hike from $357 to $428 on Wednesday. But a number of factors have had investors excited about the stock over the past year: It is the leader in music streaming and is aggressively expanding its podcast business, most notably with the strong — although controversial — launch for the Joe Rogan Experience podcast. Plus, limited pricing experiments suggest Spotify might raise prices, expand margins and improve profitability without securing better terms from rights holders.
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By now, Spotify’s stock is valued far above many analysts’ assessments. The median analyst price target is $299.46, according to Refinitiv — 15.6% below Friday’s high price. Spotify isn’t alone here: the median price target for Tencent Music Entertainment, the music streaming leader in China, is 10.1% below this week’s all-time high of $21.29.
About a quarter of the week’s gain could simply reflect the New York Stock Exchange composite’s 3.3% gain; the remainder could stem from a belief that Spotify’s growth-over-profits strategy will finally give way to a growth-with-profits one.
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