It hasn't been a great afternoon session for Spotify Technology investors, who have watched their shares sink by -4.1% to a price of $593.4. Some of you might be wondering if it's time to buy the dip. If you are considering this, make sure to check the company's fundamentals first to determine if the shares are fairly valued at today's prices.
Spotify Technology Has Elevated P/B and P/E Ratios:
Spotify Technology S.A., together with its subsidiaries, provides audio streaming subscription services worldwide. The company belongs to the Consumer Discretionary sector, which has an average price to earnings (P/E) ratio of 20.93 and an average price to book (P/B) ratio of 2.93. In contrast, Spotify Technology has a trailing 12 month P/E ratio of 76.8 and a P/B ratio of 15.72.
Spotify Technology has moved 31.4% over the last year compared to 11.7% for the S&P 500 — a difference of 19.7%. Spotify Technology has a 52 week high of $785.0 and a 52 week low of $443.21.
Generally Positive Cash Flows but Slimmer Gross Margins than the Industry Average of 36.5%:
| 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $6,764 | $7,880 | $9,668 | $11,727 | $13,247 | $15,673 |
| Gross Margins | 25% | 26% | 27% | 25% | 26% | 30% |
| Net Margins | -3% | -7% | 0% | -4% | -4% | 7% |
| Net Income (M) | -$186 | -$581 | -$34 | -$430 | -$532 | $1,138 |
| Net Interest Expense (M) | -$58 | -$416 | $155 | $289 | -$59 | -$24 |
| Diluted Shares (M) | 184 | 190 | 192 | 193 | 197 | 204 |
| Earnings Per Share | -$1.03 | -$3.1 | -$1.03 | -$2.93 | -$2.73 | $5.5 |
| EPS Growth | n/a | -200.97% | 66.77% | -184.47% | 6.83% | 301.47% |
| Avg. Price | $138.23 | $214.1 | $262.3 | $140.21 | $187.91 | $594.14 |
| P/E Ratio | -134.2 | -69.06 | -1457.22 | -62.87 | -68.83 | 104.79 |
| Free Cash Flow (M) | $573 | $259 | $361 | $46 | $680 | $2,301 |
| Current Ratio | 0.91 | 0.82 | 1.36 | 1.24 | 1.29 | 1.88 |
Spotify Technology has generally positive cash flows, a strong EPS growth trend, and a decent current ratio of 1.88. However, the firm has slimmer gross margins than its peers.
