CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
We think the current share price is an attractive entry point to buy SPOT with the shares pulling back from this week’s high. Our target price is $325 using a forward P/E of 67.0x our 2024 earnings estimate, below the five-year historic average of 78.0x. On April 23, we increased our 2024 EPS estimate to EUR4.85 from EUR2.40 and 2025’s to EUR6.30 from EUR3.95 per share. We think SPOT can grow profitably with higher unit volumes and widening margins. Our revenue forecast is EUR15.8B in 2024 and EUR17.6B in 2025 vs. EUR13.2B in 2023. Gross margins ended Q1 2024 at 27.6%, +90 bps Q/Q, with more cost discipline and one-time restructuring charges. We see 2024 gross margins at 28.0%-29.5%. We like the music streaming market’s attractive growth and stability vs. the disruption seen in video streaming. SPOT is executing its strategy of realizing higher MAU and revenue growth, while now generating higher earnings and FCF. SPOT has more room to grow in developing countries and deeper penetration of developed markets.