In the latest trading session, Spotify (SPOT) closed at $485.34, marking a -3.53% move from the previous day. This change lagged the S&P 500's daily gain of 1.75%. Elsewhere, the Dow saw an upswing of 1.86%, while the tech-heavy Nasdaq appreciated by 2.54%.
Coming into today, shares of the music-streaming service operator had gained 16.76% in the past month. In that same time, the Computer and Technology sector lost 3.11%, while the S&P 500 lost 1.63%.
The investment community will be closely monitoring the performance of Spotify in its forthcoming earnings report. The company's upcoming EPS is projected at $3.31, signifying a 789.58% increase compared to the same quarter of the previous year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $5.6 billion, up 17.66% from the year-ago period.
For the annual period, the Zacks Consensus Estimates anticipate earnings of $14.72 per share and a revenue of $22.73 billion, signifying shifts of +23.8% and +16.98%, respectively, from the last year.
It is also important to note the recent changes to analyst estimates for Spotify. Such recent modifications usually signify the changing landscape of near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.99% lower. Spotify is currently sporting a Zacks Rank of #3 (Hold).
With respect to valuation, Spotify is currently being traded at a Forward P/E ratio of 34.18. For comparison, its industry has an average Forward P/E of 18.59, which means Spotify is trading at a premium to the group.
It is also worth noting that SPOT currently has a PEG ratio of 1.23. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The Internet - Software industry currently had an average PEG ratio of 1.04 as of yesterday's close.
The Internet - Software industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 83, this industry ranks in the top 35% of all industries, numbering over 250.
The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
To follow SPOT in the coming trading sessions, be sure to utilize Zacks.com.
7 Best Stocks for the Next 30 Days
Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."
Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.7% per year. So be sure to give these hand picked 7 your immediate attention.
See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Spotify Technology (SPOT): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).