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Spotify (SPOT) Sees a More Significant Dip Than Broader Market: Some Facts to Know

Spotify (SPOT) closed at $314.99 in the latest trading session, marking a -0.87% move from the prior day. The stock trailed the S&P 500, which registered a daily loss of 0.31%. Elsewhere, the Dow saw an upswing of 0.67%, while the tech-heavy Nasdaq depreciated by 1.09%.

Coming into today, shares of the music-streaming service operator had gained 3.11% in the past month. In that same time, the Business Services sector gained 0.6%, while the S&P 500 gained 2.73%.

Market participants will be closely following the financial results of Spotify in its upcoming release. It is anticipated that the company will report an EPS of $1.12, marking a 166.27% rise compared to the same quarter of the previous year. Alongside, our most recent consensus estimate is anticipating revenue of $4.1 billion, indicating a 18.5% upward movement from the same quarter last year.

For the full year, the Zacks Consensus Estimates project earnings of $4.95 per share and a revenue of $16.81 billion, demonstrating changes of +267.8% and +17.32%, respectively, from the preceding year.

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Furthermore, it would be beneficial for investors to monitor any recent shifts in analyst projections for Spotify. Such recent modifications usually signify the changing landscape of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.46% higher. Spotify presently features a Zacks Rank of #1 (Strong Buy).

Investors should also note Spotify's current valuation metrics, including its Forward P/E ratio of 64.15. This valuation marks a premium compared to its industry's average Forward P/E of 22.04.

The Technology Services industry is part of the Business Services sector. With its current Zacks Industry Rank of 55, this industry ranks in the top 22% of all industries, numbering over 250.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.

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Spotify Technology (SPOT) : Free Stock Analysis Report

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Zacks Investment Research