In the latest trading session, Spotify (SPOT) closed at $533.37, marking a +1.8% move from the previous day. The stock's change was more than the S&P 500's daily gain of 0.33%. Elsewhere, the Dow saw an upswing of 1.08%, while the tech-heavy Nasdaq appreciated by 0.08%.
Shares of the music-streaming service operator witnessed a loss of 4.29% over the previous month, trailing the performance of the Computer and Technology sector with its gain of 1.62%, and the S&P 500's gain of 1.41%.
Market participants will be closely following the financial results of Spotify in its upcoming release. The company plans to announce its earnings on October 22, 2026. The company is forecasted to report an EPS of $3.12, showcasing a 18.54% downward movement from the corresponding quarter of the prior year. At the same time, our most recent consensus estimate is projecting a revenue of $5.73 billion, reflecting a 14.79% rise from the equivalent quarter last year.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $13.77 per share and a revenue of $22.47 billion, representing changes of +15.81% and +15.61%, respectively, from the prior year.
Investors should also pay attention to any latest changes in analyst estimates for Spotify. These recent revisions tend to reflect the evolving nature of short-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.
The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.98% lower. Spotify currently has a Zacks Rank of #4 (Sell).
From a valuation perspective, Spotify is currently exchanging hands at a Forward P/E ratio of 38.05. For comparison, its industry has an average Forward P/E of 20.42, which means Spotify is trading at a premium to the group.
Investors should also note that SPOT has a PEG ratio of 1.61 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Internet - Software industry had an average PEG ratio of 1.18 as trading concluded yesterday.
The Internet - Software industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 83, finds itself in the top 34% echelons of all 250+ industries.
The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.
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This article originally published on Zacks Investment Research (zacks.com).