Spotify (SPOT) PT Lowered to $700 at Evercore ISI

Evercore ISI analyst Mark Mahaney lowered the price target on Spotify (NYSE: SPOT) to $700.00 (from $750.00) while maintaining a Outperform rating.

The analyst comments "Our View: We reiterate our Outperform rating on SPOT, though we are modestly lowering our estimates and PT (from $750 to $700) in the wake of Beat & Mixed Q4 EPS results. These were fundamentally and relatively very good results. They well justify the 15% move up in the shares today, with we think much more ahead. 50%+ more. Revenue of €4.53B (+13% Y/Y ex-FX), record-high Gross Margin of 33.1% (+90bps Y/Y), Operating Profit of €701MM (with record-high Operating Margin of 15.5%, up +430bps Y/Y), and recordhigh MAU Net Adds (38MM to reach 751MM total) all beat ISI/Street. Fundamentals improved – revenue growth acceleration and margin expansion – and per guidance, will do so again in Q1. SPOT also provided some killer dpoints on rising engagement and on how AI features have helped drive that engagement. Finally, SPOT bought back a record amount of stock. All in, very, very good results. With this note, we close out our Tactical Outperform Call."

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