Is Spotify a Good Investment?
If you’re looking to make an investment in entertainment stocks, it might make sense to start with things you use in your own life.
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And if you’re one of the millions of people who use Spotify (SPOT) for music, you might be wondering whether it’s a good investment. Here are some details on Spotify’s business and whether it’s a good investment.
Spotify’s Business
Many analysts are optimistic about the near future for Spotify — especially now that the company seems more focused on generating profits. Spotify already built a massive user base for its streaming music service, but now it’s expected that its focus will be on profits. That could include more price hikes.
According to Investor’s Business Daily, Spotify has lost money every year since going public in 2018. A poll of analysts by FactSet showed that the analysts expect the company to earn $3.88 per share this year, compared with a loss of $2.93 per share last year.
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Is Spotify a Good Investment?
On the positive side, Spotify has done a good job raising its customer base. It ended 2023 with more than 600 million users worldwide, including more than 236 million paying customers. Spotify has a free, ad-supported service along with its ad-free subscription one.
Additionally, many analysts seem encouraged about the future for Spotify.
Based on the subscriber numbers, Spotify customers seem to be okay with increased prices for the service. And the fact that the company is looking to raise prices again signals to analysts that it is providing value to its customers. Plus, the inclusion of audiobooks has helped Spotify see even more growth.
CNET has ranked Spotify as a top pick for music streaming. The selection comes because Spotify reportedly has the biggest music catalog for all genres and some fantastic social features. Spotify also is known by its users for its playlist capabilities to create ones that reflect your tastes, moods and even the time of day.
Of the 38 analysts who cover the stock, 21 rate it a “Buy,” while none rate it a “Sell.” Though there are a few “Overweight,” “Hold” and “Underweight” ratings, according to MarketWatch.
It appears that Spotify’s business prospects are trending in the right direction. But be sure to do you due diligence before investing.
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This article originally appeared on GOBankingRates.com: Is Spotify a Good Investment?
