Key Stats for Spotify Stock
- Price Change: +19.0%
- Current Price: ~$494
- TIKR Model Target: $958
Now Live: Discover how much upside your favorite stocks could have using TIKR’s new Valuation Model (It’s free)>>>
What Happened?
Spotify Technology (SPOT) skyrocketed 19.0% to close near $494 on Tuesday
Spotify hit a new all-time high as investors aggressively accumulated shares following a “blowout” fourth-quarter earnings report.
The primary catalyst was a stunning beat on profitability, with the company reporting Earnings Per Share (EPS) of €4.43, completely crushing the consensus estimate of €2.74.
Investors were particularly impressed by the company’s operational discipline, as Monthly Active Users (MAUs) grew to 751 million.
The bullish sentiment was further fueled by the company’s guidance for gross margin expansion.
Management expects to improve throughout 2026 as price hikes and efficiencies take hold.
Analysts at Goldman Sachs immediately raised their price targets, citing the “cleanest” quarter in years.
They argued that Spotify has finally transitioned from a “growth at all costs” story to a compounding profit machine.
Free cash flow hit a record €834 million in the quarter.
The market is now pricing in a scenario where Spotify dominates the entire audio landscape, from music to audiobooks, profitably.
See analysts’ growth forecasts and price targets for Spotify stock (It’s free!) >>>
Is Spotify Undervalued Today?
During the earnings call, outgoing CEO Daniel Ek and the new leadership team laid out the case for sustainable, long-term growth.
Co-CEO Alex Norstrom highlighted the scale of their success: “It’s just incredible to think that we now serve over 0.75 billion people around the world… We marked our highest quarter ever for MAU net additions.”
CFO Christian Luiga emphasized the financial transformation: “Free cash flow was €834 million in quarter 4… we ended the quarter with €9.5 billion in cash and short-term investments.”
Co-CEO Gustav Söderström addressed the AI opportunity directly: “There is no question in my mind that we will continue to be one of the big beneficiaries of AI… we already have the right business model.”
Read the full Spotify Transcript on TIKR to see the 2026 Roadmap >>>
According to TIKR’s Advanced Valuation Model, the stock is still trading at a significant discount to its future cash flow potential.
- Target Price: $958
- Current Price: ~$494
- Potential Upside: +94%
Valuation Deep Dive
The investment case for Spotify has shifted from a user growth story to a margin expansion story.
With the stock trading at ~$494, the market is beginning to credit the company for its profitability, but the $958 target implies that margins will continue to explode higher.
- The Pricing Power: Spotify’s ability to raise prices without spiking churn proves its service is sticky and undervalued by consumers.
- The Efficiency Engine: The restructuring and cost discipline have permanently reset the company’s operating leverage, driving record Free Cash Flow.
- The Value Gap: The $958 target reflects the belief that as Spotify integrates high-margin verticals like audiobooks and AI tools, its valuation multiple will expand to match other tech platform giants.
If Spotify can maintain this level of execution in 2026, the path to $958 is paved by rapid earnings compounding.
Conclusion: Hitting the high notes. With a massive 94% upside potential to $958, Spotify offers a compelling opportunity for investors who believe the audio giant has finally unlocked the secret to profitable scaling.
See what stocks billionaire investors are buying so you can follow the smart money with TIKR.
How Much Upside Does Spotify Stock Have From Here?
With TIKR’s new Valuation Model tool, you can estimate a stock’s potential share price in under a minute.
All it takes is three simple inputs:
- Revenue Growth
- Operating Margins
- Exit P/E Multiple
If you’re not sure what to enter, TIKR automatically fills in each input using analysts’ consensus estimates, giving you a quick, reliable starting point.
From there, TIKR calculates the potential share price and total returns under Bull, Base, and Bear scenarios so you can quickly see whether a stock looks undervalued or overvalued.
See a stock’s true value in under 60 seconds (Free with TIKR) >>>
Looking for New Opportunities?
- See what stocks billionaire investors are buying so you can follow the smart money.
- Analyze stocks in as little as 5 minutes with TIKR’s all-in-one, easy-to-use platform.
- The more rocks you overturn… the more opportunities you’ll uncover. Search 100K+ global stocks, global top investor holdings, and more with TIKR.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
