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SPOTIFY TECHNOLOGY SA (SPOT) Stock Fundamental Analysis

NYSE:SPOT - New York Stock Exchange, Inc. - LU1778762911 - Common Stock

498.7  +11.19 (+2.3%)

Fundamental Rating

6

Taking everything into account, SPOT scores 6 out of 10 in our fundamental rating. SPOT was compared to 71 industry peers in the Entertainment industry. While SPOT has a great health rating, its profitability is only average at the moment. SPOT is not priced too expensively while it is growing strongly. Keep and eye on this one! With these ratings, SPOT could be worth investigating further for growth investing!.


Dividend Valuation Growth Profitability Health

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5

1. Profitability

1.1 Basic Checks

SPOT had positive earnings in the past year.
SPOT had a positive operating cash flow in the past year.
SPOT had negative earnings in each of the past 5 years.
SPOT had a positive operating cash flow in each of the past 5 years.
SPOT Yearly Net Income VS EBIT VS OCF VS FCFSPOT Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 500M -500M -1B

1.2 Ratios

The Return On Assets of SPOT (6.64%) is better than 84.85% of its industry peers.
Looking at the Return On Equity, with a value of 15.13%, SPOT belongs to the top of the industry, outperforming 87.88% of the companies in the same industry.
SPOT has a better Return On Invested Capital (12.12%) than 86.36% of its industry peers.
Industry RankSector Rank
ROA 6.64%
ROE 15.13%
ROIC 12.12%
ROA(3y)-4.16%
ROA(5y)-5.06%
ROE(3y)-13.53%
ROE(5y)-14.09%
ROIC(3y)N/A
ROIC(5y)N/A
SPOT Yearly ROA, ROE, ROICSPOT Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 200 -200 -400

1.3 Margins

SPOT has a Profit Margin of 4.64%. This is in the better half of the industry: SPOT outperforms 75.76% of its industry peers.
The Operating Margin of SPOT (6.55%) is better than 74.24% of its industry peers.
SPOT's Gross Margin of 28.68% is on the low side compared to the rest of the industry. SPOT is outperformed by 69.70% of its industry peers.
In the last couple of years the Gross Margin of SPOT has remained more or less at the same level.
Industry RankSector Rank
OM 6.55%
PM (TTM) 4.64%
GM 28.68%
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y0.31%
GM growth 5Y0.06%
SPOT Yearly Profit, Operating, Gross MarginsSPOT Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 10 -10 20 -20 -30

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7

2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), SPOT is creating some value.
Compared to 1 year ago, SPOT has more shares outstanding
The number of shares outstanding for SPOT has been increased compared to 5 years ago.
The debt/assets ratio for SPOT has been reduced compared to a year ago.
SPOT Yearly Shares OutstandingSPOT Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 50M 100M 150M
SPOT Yearly Total Debt VS Total AssetsSPOT Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 2B 4B 6B 8B

2.2 Solvency

SPOT has an Altman-Z score of 11.20. This indicates that SPOT is financially healthy and has little risk of bankruptcy at the moment.
SPOT's Altman-Z score of 11.20 is amongst the best of the industry. SPOT outperforms 96.97% of its industry peers.
SPOT has a debt to FCF ratio of 0.99. This is a very positive value and a sign of high solvency as it would only need 0.99 years to pay back of all of its debts.
SPOT has a Debt to FCF ratio of 0.99. This is amongst the best in the industry. SPOT outperforms 81.82% of its industry peers.
SPOT has a Debt/Equity ratio of 0.39. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of SPOT (0.39) is comparable to the rest of the industry.
Industry RankSector Rank
Debt/Equity 0.39
Debt/FCF 0.99
Altman-Z 11.2
ROIC/WACC1.69
WACC7.19%
SPOT Yearly LT Debt VS Equity VS FCFSPOT Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 1B 2B

2.3 Liquidity

A Current Ratio of 1.71 indicates that SPOT should not have too much problems paying its short term obligations.
SPOT has a Current ratio of 1.71. This is in the better half of the industry: SPOT outperforms 71.21% of its industry peers.
A Quick Ratio of 1.71 indicates that SPOT should not have too much problems paying its short term obligations.
SPOT has a Quick ratio of 1.71. This is in the better half of the industry: SPOT outperforms 74.24% of its industry peers.
Industry RankSector Rank
Current Ratio 1.71
Quick Ratio 1.71
SPOT Yearly Current Assets VS Current LiabilitesSPOT Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 1B 2B 3B 4B 5B

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7

3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 208.99% over the past year.
The Revenue has grown by 18.52% in the past year. This is quite good.
Measured over the past years, SPOT shows a very strong growth in Revenue. The Revenue has been growing by 20.29% on average per year.
EPS 1Y (TTM)208.99%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%339.39%
Revenue 1Y (TTM)18.52%
Revenue growth 3Y18.9%
Revenue growth 5Y20.29%
Sales Q2Q%18.8%

3.2 Future

SPOT is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 56.35% yearly.
Based on estimates for the next years, SPOT will show a quite strong growth in Revenue. The Revenue will grow by 14.59% on average per year.
EPS Next Y399.63%
EPS Next 2Y157.54%
EPS Next 3Y98.12%
EPS Next 5Y56.35%
Revenue Next Year17.25%
Revenue Next 2Y16.04%
Revenue Next 3Y15.44%
Revenue Next 5Y14.59%

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.
SPOT Yearly Revenue VS EstimatesSPOT Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 10B 20B 30B 40B
SPOT Yearly EPS VS EstimatesSPOT Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 0 5 -5 10 15

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4

4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 116.79, which means the current valuation is very expensive for SPOT.
Based on the Price/Earnings ratio, SPOT is valued a bit cheaper than 60.61% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 28.29. SPOT is valued rather expensively when compared to this.
A Price/Forward Earnings ratio of 51.71 indicates a quite expensive valuation of SPOT.
The rest of the industry has a similar Price/Forward Earnings ratio as SPOT.
When comparing the Price/Forward Earnings ratio of SPOT to the average of the S&P500 Index (24.44), we can say SPOT is valued expensively.
Industry RankSector Rank
PE 116.79
Fwd PE 51.71
SPOT Price Earnings VS Forward Price EarningsSPOT Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 20 40 60 80 100

4.2 Price Multiples

SPOT's Enterprise Value to EBITDA is on the same level as the industry average.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of SPOT is on the same level as its industry peers.
Industry RankSector Rank
P/FCF 53.63
EV/EBITDA 79.75
SPOT Per share dataSPOT EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 20 40 60

4.3 Compensation for Growth

The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
A more expensive valuation may be justified as SPOT's earnings are expected to grow with 98.12% in the coming years.
PEG (NY)0.29
PEG (5Y)N/A
EPS Next 2Y157.54%
EPS Next 3Y98.12%

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0

5. Dividend

5.1 Amount

SPOT does not give a dividend.
Industry RankSector Rank
Dividend Yield N/A

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SPOTIFY TECHNOLOGY SA

NYSE:SPOT (1/22/2025, 12:46:53 PM)

498.7

+11.19 (+2.3%)

Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)11-12 2024-11-12/amc
Earnings (Next)02-04 2025-02-04/amc
Inst Owners62.42%
Inst Owner Change-0.62%
Ins Owners17.71%
Ins Owner ChangeN/A
Market Cap100.14B
Analysts78.22
Price Target491.22 (-1.5%)
Short Float %4.56%
Short Ratio2.42
Dividend
Industry RankSector 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)1
Avg EPS beat(2)3.05%
Min EPS beat(2)-17.36%
Max EPS beat(2)23.46%
EPS beat(4)3
Avg EPS beat(4)81.28%
Min EPS beat(4)-17.36%
Max EPS beat(4)273.18%
EPS beat(8)4
Avg EPS beat(8)48.88%
EPS beat(12)6
Avg EPS beat(12)48.44%
EPS beat(16)8
Avg EPS beat(16)32.92%
Revenue beat(2)0
Avg Revenue beat(2)-2.58%
Min Revenue beat(2)-2.8%
Max Revenue beat(2)-2.36%
Revenue beat(4)0
Avg Revenue beat(4)-2.39%
Min Revenue beat(4)-3.19%
Max Revenue beat(4)-1.2%
Revenue beat(8)0
Avg Revenue beat(8)-2.31%
Revenue beat(12)0
Avg Revenue beat(12)-1.74%
Revenue beat(16)1
Avg Revenue beat(16)-1.48%
PT rev (1m)1.83%
PT rev (3m)23.6%
EPS NQ rev (1m)0%
EPS NQ rev (3m)36.92%
EPS NY rev (1m)0%
EPS NY rev (3m)1.06%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-2.31%
Revenue NY rev (1m)-0.03%
Revenue NY rev (3m)-1.09%
Valuation
Industry RankSector Rank
PE 116.79
Fwd PE 51.71
P/S 6.4
P/FCF 53.63
P/OCF 53.27
P/B 20.87
P/tB 28.05
EV/EBITDA 79.75
EPS(TTM)4.27
EY0.86%
EPS(NY)9.64
Fwd EY1.93%
FCF(TTM)9.3
FCFY1.86%
OCF(TTM)9.36
OCFY1.88%
SpS77.89
BVpS23.9
TBVpS17.78
PEG (NY)0.29
PEG (5Y)N/A
Profitability
Industry RankSector Rank
ROA 6.64%
ROE 15.13%
ROCE 15.34%
ROIC 12.12%
ROICexc 212.89%
ROICexgc N/A
OM 6.55%
PM (TTM) 4.64%
GM 28.68%
FCFM 11.94%
ROA(3y)-4.16%
ROA(5y)-5.06%
ROE(3y)-13.53%
ROE(5y)-14.09%
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 3YN/A
ROICexc growth 5YN/A
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y0.31%
GM growth 5Y0.06%
F-Score7
Asset Turnover1.43
Health
Industry RankSector Rank
Debt/Equity 0.39
Debt/FCF 0.99
Debt/EBITDA 1.6
Cap/Depr 9.6%
Cap/Sales 0.08%
Interest Coverage 27.47
Cash Conversion 162.93%
Profit Quality 257.2%
Current Ratio 1.71
Quick Ratio 1.71
Altman-Z 11.2
F-Score7
WACC7.19%
ROIC/WACC1.69
Cap/Depr(3y)28.45%
Cap/Depr(5y)62.16%
Cap/Sales(3y)0.38%
Cap/Sales(5y)0.82%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)208.99%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%339.39%
EPS Next Y399.63%
EPS Next 2Y157.54%
EPS Next 3Y98.12%
EPS Next 5Y56.35%
Revenue 1Y (TTM)18.52%
Revenue growth 3Y18.9%
Revenue growth 5Y20.29%
Sales Q2Q%18.8%
Revenue Next Year17.25%
Revenue Next 2Y16.04%
Revenue Next 3Y15.44%
Revenue Next 5Y14.59%
EBIT growth 1Y321.75%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year451.76%
EBIT Next 3Y107.04%
EBIT Next 5Y60.3%
FCF growth 1Y806.03%
FCF growth 3Y55%
FCF growth 5Y25.21%
OCF growth 1Y672.34%
OCF growth 3Y37.95%
OCF growth 5Y14.6%