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 72 industry peers in the Entertainment industry. SPOT has an excellent financial health rating, but there are some minor concerns on its profitability. SPOT is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year SPOT was profitable.
SPOT had a positive operating cash flow in the past year.
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
With an excellent Return On Assets value of 9.19%, SPOT belongs to the best of the industry, outperforming 91.67% of the companies in the same industry.
SPOT has a better Return On Equity (18.66%) than 88.89% of its industry peers.
SPOT's Return On Invested Capital of 21.54% is amongst the best of the industry. SPOT outperforms 95.83% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.19% | ||
| ROE | 18.66% | ||
| ROIC | 21.54% |
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 7.19%. This is amongst the best in the industry. SPOT outperforms 83.33% of its industry peers.
SPOT's Operating Margin of 10.51% is fine compared to the rest of the industry. SPOT outperforms 79.17% of its industry peers.
SPOT's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 31.10%, SPOT is doing worse than 65.28% 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 | 10.51% | ||
| PM (TTM) | 7.19% | ||
| GM | 31.1% |
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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), SPOT is creating value.
The number of shares outstanding for SPOT has been increased compared to 1 year ago.
The number of shares outstanding for SPOT has been increased compared to 5 years ago.
Compared to 1 year ago, SPOT has an improved debt to assets ratio.
2.2 Solvency
SPOT has an Altman-Z score of 13.20. This indicates that SPOT is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of SPOT (13.20) is better than 95.83% of its industry peers.
SPOT has a debt to FCF ratio of 0.81. This is a very positive value and a sign of high solvency as it would only need 0.81 years to pay back of all of its debts.
SPOT has a Debt to FCF ratio of 0.81. This is amongst the best in the industry. SPOT outperforms 84.72% of its industry peers.
A Debt/Equity ratio of 0.07 indicates that SPOT is not too dependend on debt financing.
SPOT has a better Debt to Equity ratio (0.07) than 63.89% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.07 | ||
| Debt/FCF | 0.81 | ||
| Altman-Z | 13.2 |
ROIC/WACC2.89
WACC7.45%
2.3 Liquidity
A Current Ratio of 1.48 indicates that SPOT should not have too much problems paying its short term obligations.
SPOT has a Current ratio of 1.48. This is in the better half of the industry: SPOT outperforms 65.28% of its industry peers.
A Quick Ratio of 1.48 indicates that SPOT should not have too much problems paying its short term obligations.
SPOT's Quick ratio of 1.48 is fine compared to the rest of the industry. SPOT outperforms 70.83% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.48 | ||
| Quick Ratio | 1.48 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 4575.00% over the past year.
The Revenue has grown by 17.24% in the past year. This is quite good.
The Revenue has been growing by 18.30% on average over the past years. This is quite good.
EPS 1Y (TTM)4575%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%10.31%
Revenue 1Y (TTM)17.24%
Revenue growth 3Y17.47%
Revenue growth 5Y18.3%
Sales Q2Q%15.24%
3.2 Future
Based on estimates for the next years, SPOT will show a very strong growth in Earnings Per Share. The EPS will grow by 27.60% on average per year.
Based on estimates for the next years, SPOT will show a quite strong growth in Revenue. The Revenue will grow by 12.54% on average per year.
EPS Next Y54.47%
EPS Next 2Y51.87%
EPS Next 3Y42.75%
EPS Next 5Y27.6%
Revenue Next Year13.74%
Revenue Next 2Y14.83%
Revenue Next 3Y14.4%
Revenue Next 5Y12.54%
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
A Price/Earnings ratio of 110.02 indicates a quite expensive valuation of SPOT.
SPOT's Price/Earnings ratio is a bit cheaper when compared to the industry. SPOT is cheaper than 63.89% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 27.45. SPOT is valued rather expensively when compared to this.
SPOT is valuated quite expensively with a Price/Forward Earnings ratio of 48.53.
65.28% of the companies in the same industry are more expensive than SPOT, based on the Price/Forward Earnings ratio.
SPOT's Price/Forward Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 21.90.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 110.02 | ||
| Fwd PE | 48.53 |
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 62.50% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 48.36 | ||
| EV/EBITDA | 63 |
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.
SPOT's earnings are expected to grow with 42.75% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.02
PEG (5Y)N/A
EPS Next 2Y51.87%
EPS Next 3Y42.75%
5. Dividend
5.1 Amount
No dividends for SPOT!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
725.05
+15.55 (+2.19%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)
Earnings (Next)
Inst Owners69.05%
Inst Owner Change2.45%
Ins Owners16.2%
Ins Owner ChangeN/A
Market Cap148.42B
Analysts76.96
Price Target684.43 (-5.6%)
Short Float %4.6%
Short Ratio3.27
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)-32.7%
Min EPS beat(2)-52.29%
Max EPS beat(2)-13.1%
EPS beat(4)1
Avg EPS beat(4)-14.82%
Min EPS beat(4)-52.29%
Max EPS beat(4)23.46%
EPS beat(8)4
Avg EPS beat(8)45.94%
EPS beat(12)4
Avg EPS beat(12)23.18%
EPS beat(16)7
Avg EPS beat(16)27.54%
Revenue beat(2)0
Avg Revenue beat(2)-1.52%
Min Revenue beat(2)-2.29%
Max Revenue beat(2)-0.75%
Revenue beat(4)0
Avg Revenue beat(4)-2.05%
Min Revenue beat(4)-2.8%
Max Revenue beat(4)-0.75%
Revenue beat(8)0
Avg Revenue beat(8)-2.07%
Revenue beat(12)0
Avg Revenue beat(12)-1.92%
Revenue beat(16)1
Avg Revenue beat(16)-1.48%
PT rev (1m)3.71%
PT rev (3m)4.97%
EPS NQ rev (1m)-1.44%
EPS NQ rev (3m)-4.19%
EPS NY rev (1m)-3.06%
EPS NY rev (3m)-17.58%
Revenue NQ rev (1m)-0.02%
Revenue NQ rev (3m)-2.6%
Revenue NY rev (1m)0.08%
Revenue NY rev (3m)-1.99%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 110.02 | ||
| Fwd PE | 48.53 | ||
| P/S | 7.78 | ||
| P/FCF | 48.36 | ||
| P/OCF | 48.03 | ||
| P/B | 20.21 | ||
| P/tB | 25.01 | ||
| EV/EBITDA | 63 |
EPS(TTM)6.59
EY0.91%
EPS(NY)14.94
Fwd EY2.06%
FCF(TTM)14.99
FCFY2.07%
OCF(TTM)15.1
OCFY2.08%
SpS93.18
BVpS35.87
TBVpS28.99
PEG (NY)2.02
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.19% | ||
| ROE | 18.66% | ||
| ROCE | 25.38% | ||
| ROIC | 21.54% | ||
| ROICexc | N/A | ||
| ROICexgc | N/A | ||
| OM | 10.51% | ||
| PM (TTM) | 7.19% | ||
| GM | 31.1% | ||
| FCFM | 16.09% |
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 Turnover1.28
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.07 | ||
| Debt/FCF | 0.81 | ||
| Debt/EBITDA | 0.25 | ||
| Cap/Depr | 15.38% | ||
| Cap/Sales | 0.11% | ||
| Interest Coverage | 42.65 | ||
| Cash Conversion | 144.21% | ||
| Profit Quality | 223.93% | ||
| Current Ratio | 1.48 | ||
| Quick Ratio | 1.48 | ||
| Altman-Z | 13.2 |
F-Score7
WACC7.45%
ROIC/WACC2.89
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)4575%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%10.31%
EPS Next Y54.47%
EPS Next 2Y51.87%
EPS Next 3Y42.75%
EPS Next 5Y27.6%
Revenue 1Y (TTM)17.24%
Revenue growth 3Y17.47%
Revenue growth 5Y18.3%
Sales Q2Q%15.24%
Revenue Next Year13.74%
Revenue Next 2Y14.83%
Revenue Next 3Y14.4%
Revenue Next 5Y12.54%
EBIT growth 1Y909.47%
EBIT growth 3Y143.94%
EBIT growth 5YN/A
EBIT Next Year82.88%
EBIT Next 3Y45.95%
EBIT Next 5Y32.91%
FCF growth 1Y5019.61%
FCF growth 3Y102.27%
FCF growth 5Y39.14%
OCF growth 1Y3766.18%
OCF growth 3Y85.41%
OCF growth 5Y32.05%