Shares of Spotify (SPOT) were little changed today despite receiving analyst praise. Indeed, according to analysts Justin Patterson and Sergio Segura from KeyBanc Capital Markets, Spotify could hit over one billion monthly active users and 400 million premium subscribers by 2030. They predict Spotify could generate more than €30 ($33.40) per share in earnings by then, which is 40% higher than current estimates.
The analysts used regional smartphone usage to estimate Spotify’s potential market and linked those numbers to the company’s long-term financials. KeyBanc estimates Spotify’s total addressable market (TAM) will grow to €3.9 billion by 2030, up from €3.1 billion in 2023, and believes Spotify could reach one billion users if it grows its market share by 90 basis points per year during this timeframe.
The analysts also believe Spotify’s service is currently underpriced, which could give it room to increase prices going forward. As a result, KeyBanc raised its price target for Spotify from $420 to $440 and expects a 30% compound annual growth rate between now and 2030.
It’s worth noting that Patterson is a 4.4-star rated analyst with a 72% success rate on SPOT stock and an average return of 30.56% per rating.
Is Spot Stock a Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on SPOT stock based on 22 Buys, five Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 113% rally in its share price over the past year, the average SPOT price target of $392.80 per share implies 15.93% upside potential.
