Spotify (SPOT) closed the most recent trading day at $476.08, moving -1.92% from the previous trading session. This change lagged the S&P 500's 0.51% loss on the day. Elsewhere, the Dow lost 0.2%, while the tech-heavy Nasdaq lost 1.47%.
The stock of music-streaming service operator has risen by 6.54% in the past month, leading the Computer and Technology sector's loss of 2.99% and the S&P 500's gain of 0.53%.
Market participants will be closely following the financial results of Spotify in its upcoming release. The company plans to announce its earnings on August 4, 2026. On that day, Spotify is projected to report earnings of $3.29 per share, which would represent year-over-year growth of 785.42%. Alongside, our most recent consensus estimate is anticipating revenue of $5.6 billion, indicating a 17.66% upward movement from the same quarter last year.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $14.59 per share and revenue of $22.67 billion. These totals would mark changes of +22.71% and +16.66%, respectively, from last year.
Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Spotify. Such recent modifications usually signify the changing landscape of near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.61% lower. Spotify is currently a Zacks Rank #4 (Sell).
Valuation is also important, so investors should note that Spotify has a Forward P/E ratio of 33.27 right now. Its industry sports an average Forward P/E of 20.31, so one might conclude that Spotify is trading at a premium comparatively.
We can additionally observe that SPOT currently boasts a PEG ratio of 1.19. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. By the end of yesterday's trading, the Internet - Software industry had an average PEG ratio of 1.07.
The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 89, putting it in the top 37% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.
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This article originally published on Zacks Investment Research (zacks.com).