Spotify Technology got another boost from Wall Street on Sunday, when Wall Street Zen raised the stock from hold to buy. The move added a fresh layer of support for SPOT shares after a week that already featured several firm calls and a pair of executive stock sales.
SPOT opened at $516.85 on Friday, putting it well above its 50-day moving average of $501.08 and below its 200-day average of $552.33. The stock has traded between $405.00 and $785.00 over the past year, and the company now carries a market value of $106.41 billion. MarketBeat data showed a consensus rating of Moderate Buy and a consensus target price of $692.14, while the latest round of analyst coverage included two Strong Buy ratings, 22 Buy ratings and 7 Hold ratings.
The upgrade from Wall Street Zen was part of a dense sequence of recent analyst moves. Sanford C. Bernstein cut its target on Jan. 14 from $830.00 to $650.00 and kept an outperform rating. The Goldman Sachs Group moved to a buy rating on Jan. 23 while lowering its target from $735.00 to $700.00. Moffett Nathanson started coverage on Jan. 27 with a neutral rating and a $487.00 target, followed by Arete Research on Feb. 26 with a buy rating and a $586.00 target. Daiwa Securities Group began coverage on March 26 with an outperform rating and a $535.00 target.
Those calls came after Spotify reported earnings on Feb. 11 of $5.16 per share on revenue of $5.32 billion, topping estimates of $3.16 per share and $5.14 billion in revenue. Revenue rose 6.8% from a year earlier, net margin was 13.16% and return on equity was 31.35%. Analysts are now projecting 15.73 EPS for the current fiscal year, a sign that expectations remain high even with the stock still below its recent highs.
What makes the setup more complicated is that the confidence from analysts has arrived alongside selling by the top ranks of the company. CEO Gustav Soderstrom sold 20,833 shares on April 1 at an average price of $473.52, a transaction worth $9,864,842.16 that left him with 20,609 shares valued at about $9,758,773.68, a 50.27% drop in his ownership. CEO Alex Norstrom also sold 5,436 shares that day at an average price of $479.51 for $2,606,616.36. The stock is getting stronger support from analysts, but the executives closest to the business have been trimming exposure at the same time.
For investors, the answer is already visible in the numbers: SPOT has enough growth and profitability to keep drawing upgrades, but not enough certainty to make the bullish case unanimous. The next test is whether the stock can hold above recent trading levels while the market decides which signal to trust more, the analysts or the sellers.
