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Can Spotify Stock Finally Break The $200 Mark Today? What’s Next?

SPOT stock

Should You Include SPOT Stock On Your Watchlist Now?

Music-streaming champion Spotify (SPOT Stock Report) is in the spotlight right now. Shares of Spotify are reaching its an all-time high of $200. Many analysts argued that the streaming leader is likely to be multiples of its current size in the coming decade. It is a common fact that Spotify is famous for its music streaming services. But there’s a recent addition to that offering lately, podcasting.

Podcasting A New Revenue Stream For Spotify In The Long Run

One reason podcasts are so popular is that the format is uniquely suited to fit into our busy lives. Curious about any particular topic? There’s a podcast for that. Not much time to spare? You’ll find a podcast that fit into that time frame. Many of us might not have the patience to read a lengthy article. Yet, listening to lengthy articles in bite sized chunks during our commute can be quite attractive. That is, of course, if the presentation of the podcast is entertaining.

If you have been following Spotify closely, you would have known that Kim Kardashian West has entered into a deal with Spotify to produce and host a new exclusive podcast. The deal follows Spotify’s landmark contract in May with podcast juggernaut Joe Rogan. The deal is just the latest in Spotify’s ongoing push to capture more of the podcasting landscape. During Spotify’s first-quarter earnings call, founder and CEO Daniel Ek said Spotify is now “the No. 1 audio service for podcasts in dozens of countries around the world and quickly gaining ground where we’re not.”

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How Fast Is Spotify Growing?

The company only went public in 2018. But what the company has achieved thus far looks promising, though. Spotify’s total number of monthly active users (MAUs) grew 31% annually to 286 million last quarter. Its number of ad-supported MAUs rose 32% to 163 million, while its number of premium subscribers rose 31% to 130 million.

The company collected $7.6 billion in revenues last year, generating $490 million of free cash flows after allocating $924 million into sales and marketing budgets. Spotify expects its revenue to rise 5%-17% annually in the second quarter and 13%-19% for the full year. However, it still expects its operating losses to widen for both periods, so it will likely remain unprofitable for the foreseeable future. That’s no big deal since many tech companies will have to make losses before making any profits. 

Spotify is likely to follow Netflix’s growth-oriented business model for the foreseeable future. Right now, the company is focusing on building a massive business platform that will stave off challengers and maximize long term profits that follow at the end of high-growth phase. That is why its current podcast ventures are so crucial. With the ongoing improvement in content, the company expects the paying subscriber account to at least double or even triple in the coming 5 years.

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What Does The Future Hold For Spotify?

Over the long term, Spotify is likely to gain further share of audio streaming in cars, as data plans continue to get cheaper. As more cars are going to have embedded modems, Spotify can be a part of vehicle entertainment systems. Such services are likely to take enormous amounts of market share away from traditional radio players. Spotify’s total user base increases as time goes by. Coupled with the expected profits produced by high-margin podcast ads, should investors buy SPOT stock right now?

By Amos C

Amos is the global markets correspondent for StockMarket.com. His boots on the ground insight into emerging markets has given him the unique ability to stay ahead of new market trends and deliver timely data when it matters most. Based in Asia, Amos has made a point to monitor the foreign markets closely, dissect stock market trends and then apply them to the North American markets; in addition to global markets.

Amos has a deep-rooted background in foreign exchange and commodities. His previous experience working within the cryptocurrency arena has given him the advantage to identify the fast-moving stock market and financial trends. Amos calls Hong Kong home and has been a financial content writer for the last 3 years.

He has managed teams of international media strategists and financial writers to cover all top stories in the stock market each day. His skills include his tireless drive to find the most valid information and actionable details that investors can use to formulate valid decisions on stocks to buy or stocks to avoid. Furthermore, Amos’ ability to cover trending stories across the globe brings StockMarket.com a fresh perspective on key data and how it not only affects the North American markets but also how it could translate to the world markets alike.

Most of the time you can find him diving into corporate filings, focusing on fundamentals that could influence major market moves. One of his passions is researching technology and biotechnology stocks. Some of the most cutting-edge innovations have stemmed from these industries. While many don’t become industry blockbusters, the processes and applications of these innovations has led to some of the biggest developments known to man in the modern age. As a global correspondent, Amos has been able to see both sides of the story as it relates to world news and offers a true, personal approach, cutting through the noise of the mass media. He was integral in reporting on the Hong Kong uprising and doing first-hand research on international sentiment from the novel coronavirus.

In his free time, Amos is an avid fan of music and art and enjoys attending concerts.