SPOTIFY TECHNOLOGY SA (SPOT) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:SPOT - LU1778762911 - Common Stock
496.26 USD
-12.44 (-2.45%)
Taking everything into account, SPOT scores 6 out of 10 in our fundamental rating. SPOT was compared to 80 industry peers in the Entertainment industry. SPOT is in great health and has no worries on liquidiy or solvency at all, but the profibility rating is only average. SPOT has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
- SPOT had positive earnings in the past year.
- In the past year SPOT had a positive cash flow from operations.
- SPOT had negative earnings in 4 of the past 5 years.
- SPOT had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- SPOT has a better Return On Assets (9.56%) than 87.50% of its industry peers.
- SPOT has a better Return On Equity (18.06%) than 87.50% of its industry peers.
- SPOT's Return On Invested Capital of 19.82% is amongst the best of the industry. SPOT outperforms 96.25% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.56% | ||
| ROE | 18.06% | ||
| ROIC | 19.82% |
ROA(3y)-0.84%
ROA(5y)-2.44%
ROE(3y)-6.13%
ROE(5y)-8.14%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
- SPOT has a Profit Margin of 8.32%. This is amongst the best in the industry. SPOT outperforms 81.25% of its industry peers.
- SPOT's Operating Margin of 11.68% is fine compared to the rest of the industry. SPOT outperforms 73.75% of its industry peers.
- In the last couple of years the Operating Margin of SPOT has grown nicely.
- Looking at the Gross Margin, with a value of 31.75%, SPOT is doing worse than 65.00% of the companies in the same industry.
- In the last couple of years the Gross Margin of SPOT has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 11.68% | ||
| PM (TTM) | 8.32% | ||
| GM | 31.75% |
OM growth 3Y107.65%
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y4.12%
GM growth 5Y3.51%
2. Health
2.1 Basic Checks
- SPOT has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
- SPOT has more shares outstanding than it did 1 year ago.
- SPOT has more shares outstanding than it did 5 years ago.
- Compared to 1 year ago, SPOT has an improved debt to assets ratio.
2.2 Solvency
- An Altman-Z score of 9.66 indicates that SPOT is not in any danger for bankruptcy at the moment.
- With an excellent Altman-Z score value of 9.66, SPOT belongs to the best of the industry, outperforming 96.25% of the companies in the same industry.
- The Debt to FCF ratio of SPOT is 0.75, which is an excellent value as it means it would take SPOT, only 0.75 years of fcf income to pay off all of its debts.
- Looking at the Debt to FCF ratio, with a value of 0.75, SPOT belongs to the top of the industry, outperforming 86.25% of the companies in the same industry.
- A Debt/Equity ratio of 0.06 indicates that SPOT is not too dependend on debt financing.
- Looking at the Debt to Equity ratio, with a value of 0.06, SPOT is in the better half of the industry, outperforming 65.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.06 | ||
| Debt/FCF | 0.75 | ||
| Altman-Z | 9.66 |
ROIC/WACC2.59
WACC7.64%
2.3 Liquidity
- A Current Ratio of 1.61 indicates that SPOT should not have too much problems paying its short term obligations.
- SPOT has a better Current ratio (1.61) than 70.00% of its industry peers.
- SPOT has a Quick Ratio of 1.61. This is a normal value and indicates that SPOT is financially healthy and should not expect problems in meeting its short term obligations.
- Looking at the Quick ratio, with a value of 1.61, SPOT is in the better half of the industry, outperforming 71.25% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.61 | ||
| Quick Ratio | 1.61 |
3. Growth
3.1 Past
- SPOT shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 38.11%, which is quite impressive.
- Looking at the last year, SPOT shows a quite strong growth in Revenue. The Revenue has grown by 11.89% in the last year.
- Measured over the past years, SPOT shows a quite strong growth in Revenue. The Revenue has been growing by 18.30% on average per year.
EPS 1Y (TTM)38.11%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%126.21%
Revenue 1Y (TTM)11.89%
Revenue growth 3Y17.47%
Revenue growth 5Y18.3%
Sales Q2Q%7.12%
3.2 Future
- The Earnings Per Share is expected to grow by 29.34% on average over the next years. This is a very strong growth
- Based on estimates for the next years, SPOT will show a quite strong growth in Revenue. The Revenue will grow by 12.46% on average per year.
EPS Next Y34.11%
EPS Next 2Y50.58%
EPS Next 3Y42.21%
EPS Next 5Y29.34%
Revenue Next Year9.53%
Revenue Next 2Y11.7%
Revenue Next 3Y12.45%
Revenue Next 5Y12.46%
3.3 Evolution
- The estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
4. Valuation
4.1 Price/Earnings Ratio
- SPOT is valuated quite expensively with a Price/Earnings ratio of 72.87.
- SPOT's Price/Earnings ratio is a bit cheaper when compared to the industry. SPOT is cheaper than 66.25% of the companies in the same industry.
- Compared to an average S&P500 Price/Earnings ratio of 28.60, SPOT is valued quite expensively.
- With a Price/Forward Earnings ratio of 33.17, SPOT can be considered very expensive at the moment.
- 70.00% of the companies in the same industry are more expensive than SPOT, based on the Price/Forward Earnings ratio.
- The average S&P500 Price/Forward Earnings ratio is at 25.83. SPOT is valued slightly more expensive when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 72.87 | ||
| Fwd PE | 33.17 |
4.2 Price Multiples
- The rest of the industry has a similar Enterprise Value to EBITDA ratio as SPOT.
- 75.00% of the companies in the same industry are more expensive than SPOT, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 29.27 | ||
| EV/EBITDA | 37 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates SPOT does not grow enough to justify the current Price/Earnings ratio.
- The decent profitability rating of SPOT may justify a higher PE ratio.
- A more expensive valuation may be justified as SPOT's earnings are expected to grow with 42.21% in the coming years.
PEG (NY)2.14
PEG (5Y)N/A
EPS Next 2Y50.58%
EPS Next 3Y42.21%
5. Dividend
5.1 Amount
- No dividends for SPOT!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
SPOTIFY TECHNOLOGY SA / SPOT FAQ
What is the fundamental rating for SPOT stock?
ChartMill assigns a fundamental rating of 6 / 10 to SPOT.
What is the valuation status for SPOT stock?
ChartMill assigns a valuation rating of 4 / 10 to SPOTIFY TECHNOLOGY SA (SPOT). This can be considered as Fairly Valued.
Can you provide the profitability details for SPOTIFY TECHNOLOGY SA?
SPOTIFY TECHNOLOGY SA (SPOT) has a profitability rating of 6 / 10.
What is the financial health of SPOTIFY TECHNOLOGY SA (SPOT) stock?
The financial health rating of SPOTIFY TECHNOLOGY SA (SPOT) is 7 / 10.