SPOTIFY TECHNOLOGY SA (SPOT) Stock Fundamental Analysis
NYSE:SPOT - New York Stock Exchange, Inc. - LU1778762911 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to SPOT. SPOT was compared to 71 industry peers in the Entertainment industry. SPOT has an excellent financial health rating, but there are some minor concerns on its profitability. 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.
Each year in the past 5 years SPOT had a positive operating cash flow.
1.2 Ratios
The Return On Assets of SPOT (9.48%) is better than 90.91% of its industry peers.
The Return On Equity of SPOT (20.60%) is better than 86.36% of its industry peers.
SPOT has a better Return On Invested Capital (15.33%) than 93.94% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.48% | ||
| ROE | 20.6% | ||
| ROIC | 15.33% |
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 better Profit Margin (7.26%) than 81.82% of its industry peers.
SPOT's Operating Margin of 8.71% is fine compared to the rest of the industry. SPOT outperforms 75.76% of its industry peers.
SPOT's Operating Margin has improved in the last couple of years.
With a Gross Margin value of 30.14%, SPOT is not doing good in the industry: 71.21% of the companies in the same industry are doing better.
SPOT's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 8.71% | ||
| PM (TTM) | 7.26% | ||
| GM | 30.14% |
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.
The debt/assets ratio for SPOT has been reduced compared to a year ago.
2.2 Solvency
SPOT has an Altman-Z score of 13.23. This indicates that SPOT is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of SPOT (13.23) is better than 96.97% of its industry peers.
The Debt to FCF ratio of SPOT is 0.88, which is an excellent value as it means it would take SPOT, only 0.88 years of fcf income to pay off all of its debts.
With an excellent Debt to FCF ratio value of 0.88, SPOT belongs to the best of the industry, outperforming 83.33% of the companies in the same industry.
SPOT has a Debt/Equity ratio of 0.36. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of SPOT (0.36) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.36 | ||
| Debt/FCF | 0.88 | ||
| Altman-Z | 13.23 |
ROIC/WACC2.13
WACC7.2%
2.3 Liquidity
A Current Ratio of 1.88 indicates that SPOT should not have too much problems paying its short term obligations.
The Current ratio of SPOT (1.88) is better than 72.73% of its industry peers.
A Quick Ratio of 1.88 indicates that SPOT should not have too much problems paying its short term obligations.
SPOT's Quick ratio of 1.88 is fine compared to the rest of the industry. SPOT outperforms 75.76% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.88 | ||
| Quick Ratio | 1.88 |
3. Growth
3.1 Past
SPOT shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 374.13%, which is quite impressive.
The Revenue has grown by 18.31% in the past year. This is quite good.
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)374.13%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%375.68%
Revenue 1Y (TTM)18.31%
Revenue growth 3Y17.47%
Revenue growth 5Y18.3%
Sales Q2Q%15.55%
3.2 Future
SPOT is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 18.27% yearly.
Based on estimates for the next years, SPOT will show a quite strong growth in Revenue. The Revenue will grow by 14.32% on average per year.
EPS Next Y89.47%
EPS Next 2Y56.06%
EPS Next 3Y44.73%
EPS Next 5Y18.27%
Revenue Next Year15.63%
Revenue Next 2Y15.12%
Revenue Next 3Y14.45%
Revenue Next 5Y14.32%
3.3 Evolution
Although the future Revenue growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 105.63, SPOT can be considered very expensive at the moment.
Compared to the rest of the industry, the Price/Earnings ratio of SPOT is on the same level as its industry peers.
The average S&P500 Price/Earnings ratio is at 29.63. SPOT is valued rather expensively when compared to this.
With a Price/Forward Earnings ratio of 55.71, SPOT can be considered very expensive at the moment.
Compared to the rest of the industry, the Price/Forward Earnings ratio of SPOT indicates a somewhat cheap valuation: SPOT is cheaper than 60.61% of the companies listed in the same industry.
SPOT's Price/Forward Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 22.68.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 105.63 | ||
| Fwd PE | 55.71 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of SPOT is on the same level as its industry peers.
SPOT's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. SPOT is cheaper than 62.12% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 51.91 | ||
| EV/EBITDA | 78.18 |
4.3 Compensation for Growth
SPOT's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The decent profitability rating of SPOT may justify a higher PE ratio.
SPOT's earnings are expected to grow with 44.73% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.18
PEG (5Y)N/A
EPS Next 2Y56.06%
EPS Next 3Y44.73%
5. Dividend
5.1 Amount
No dividends for SPOT!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
607.38
-29.39 (-4.62%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)
Earnings (Next)
Inst Owners67.74%
Inst Owner Change6.12%
Ins Owners16.27%
Ins Owner ChangeN/A
Market Cap123.81B
Analysts77.33
Price Target632.58 (4.15%)
Short Float %3.8%
Short Ratio2.95
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-15.23%
Min EPS beat(2)-17.36%
Max EPS beat(2)-13.1%
EPS beat(4)2
Avg EPS beat(4)9.71%
Min EPS beat(4)-17.36%
Max EPS beat(4)45.84%
EPS beat(8)4
Avg EPS beat(8)48.21%
EPS beat(12)5
Avg EPS beat(12)43.05%
EPS beat(16)8
Avg EPS beat(16)33.16%
Revenue beat(2)0
Avg Revenue beat(2)-1.78%
Min Revenue beat(2)-2.8%
Max Revenue beat(2)-0.75%
Revenue beat(4)0
Avg Revenue beat(4)-1.78%
Min Revenue beat(4)-2.8%
Max Revenue beat(4)-0.75%
Revenue beat(8)0
Avg Revenue beat(8)-2.18%
Revenue beat(12)0
Avg Revenue beat(12)-1.75%
Revenue beat(16)1
Avg Revenue beat(16)-1.46%
PT rev (1m)2.68%
PT rev (3m)24.37%
EPS NQ rev (1m)14.23%
EPS NQ rev (3m)51.63%
EPS NY rev (1m)12.12%
EPS NY rev (3m)23.02%
Revenue NQ rev (1m)1.27%
Revenue NQ rev (3m)0.96%
Revenue NY rev (1m)1.2%
Revenue NY rev (3m)0.11%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 105.63 | ||
| Fwd PE | 55.71 | ||
| P/S | 7.56 | ||
| P/FCF | 51.91 | ||
| P/OCF | 51.52 | ||
| P/B | 21.46 | ||
| P/tB | 27.73 | ||
| EV/EBITDA | 78.18 |
EPS(TTM)5.75
EY0.95%
EPS(NY)10.9
Fwd EY1.79%
FCF(TTM)11.7
FCFY1.93%
OCF(TTM)11.79
OCFY1.94%
SpS80.29
BVpS28.31
TBVpS21.91
PEG (NY)1.18
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.48% | ||
| ROE | 20.6% | ||
| ROCE | 18.07% | ||
| ROIC | 15.33% | ||
| ROICexc | 1082.59% | ||
| ROICexgc | N/A | ||
| OM | 8.71% | ||
| PM (TTM) | 7.26% | ||
| GM | 30.14% | ||
| FCFM | 14.57% |
ROA(3y)-0.84%
ROA(5y)-2.44%
ROE(3y)-6.13%
ROE(5y)-8.14%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3Y291.99%
ROICexc growth 5YN/A
OM growth 3Y107.65%
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y4.12%
GM growth 5Y3.51%
F-Score7
Asset Turnover1.31
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.36 | ||
| Debt/FCF | 0.88 | ||
| Debt/EBITDA | 1.35 | ||
| Cap/Depr | 14.05% | ||
| Cap/Sales | 0.11% | ||
| Interest Coverage | 37.92 | ||
| Cash Conversion | 154.85% | ||
| Profit Quality | 200.7% | ||
| Current Ratio | 1.88 | ||
| Quick Ratio | 1.88 | ||
| Altman-Z | 13.23 |
F-Score7
WACC7.2%
ROIC/WACC2.13
Cap/Depr(3y)10.82%
Cap/Depr(5y)33.93%
Cap/Sales(3y)0.12%
Cap/Sales(5y)0.45%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)374.13%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%375.68%
EPS Next Y89.47%
EPS Next 2Y56.06%
EPS Next 3Y44.73%
EPS Next 5Y18.27%
Revenue 1Y (TTM)18.31%
Revenue growth 3Y17.47%
Revenue growth 5Y18.3%
Sales Q2Q%15.55%
Revenue Next Year15.63%
Revenue Next 2Y15.12%
Revenue Next 3Y14.45%
Revenue Next 5Y14.32%
EBIT growth 1Y1329.73%
EBIT growth 3Y143.94%
EBIT growth 5YN/A
EBIT Next Year84.03%
EBIT Next 3Y44.42%
EBIT Next 5Y21.75%
FCF growth 1Y238.87%
FCF growth 3Y102.27%
FCF growth 5Y39.14%
OCF growth 1Y238.38%
OCF growth 3Y85.41%
OCF growth 5Y32.05%