Spotify has the ability to add more global users than Meta Platforms, YouTube, Amazon Prime or Netflix, and to increase revenue 16% annually through 2030, according to Oppenheimer. Analyst Jason Helfstein upgraded the music streaming platform to outperform from perform and set an $800 price target on the stock, which implies shares can gain nearly 19%. "We believe that SPOT will benefit from the secular tailwind of growing digital audio streaming adoption and that the company's subscription economics are better than most believe," Helfstein wrote in a report on Wednesday. Shares of Spotify have rallied 51% so far this year. The Luxembourg-based company earlier this year recorded its first full year of profitability when it released fourth-quarter results. First-quarter results in April showed 12% year-over-year growth in subscribers to 268 million, and a 4 percentage-point increase in gross profit margin to 31.6%. Looking ahead, Helfstein said Spotify can make more money from new and existing users. Compound annual growth in revenue through 2030 is expected to reach 16%, boosted by 9% annual increases in subscribers and average revenue per user rising 21%, he said. "For years SPOT has meaningfully under-monetized its free tier, using this as a conversion funnel, as the company tries to scale advertising," the analyst said. SPOT 1Y mountain Spotify stock over the past year. Helfstein cited several tailwinds for his upgrade, including expectations that: Spotify boasts the "longest runway" among large-cap internet stocks to increase its number of monthly active users, or MAU, and capture a majority of listeners that are abandoning terrestrial radio (Spotify in the fourth quarter recorded 675 million MAUs, while analysts polled by StreetAccount expected 664.3 million). A widely expected, higher-priced "Superfan" tier will drive revenue. Spotify will likely monetize its free/lowest fee over time, unlocking a multibillion-dollar revenue opportunity. Spotify is already benefiting from conversion improvements from App Store changes, after a recent court ruling against Apple reduced friction for iOS "free-to-paid" conversion.
