Spotify (SPOT) PT Reduced to $358 at Jefferies on Light MAUs

Jefferies analyst Andy Uerkwitz lowered the price target on Spotify (NYSE: SPOT) to $358.00 (from $360.00) after MAUs came in light of expectations despite reporting others positives. Gross margin was above range; paid subscribers were inline; ad revenue was up more than 2x; podcast revenues were up nearly 3x organically. Growth initiatives appear to be working but are overshadowed by missed MAUs which management attributes to lack of predictability due to COVID.

The analyst reiterated a Buy rating, stating "Numerous creator products have gone live in the last 3-6 months and several are doing well including marketplace, discovery mode (40% improvement to listener count); Open Access, Audience Network, & Marquee. We are impressed with Spotify's early efforts to become a real platform and thus far we are seeing green shoots of payoff via advertising revenues and podcast engagement stats. We believe MAUs will become a favorable metric as well with time."

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