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- 1 SPOT stock fell 14.26% after the earnings announcement.
- 2 Spotify messed with podcasts and new user signups along with other factors that caused the drop.
Spotify Technology S.A. (NYSE: SPOT) clearly missed the spot while announcing its Q2 earnings on July 25, 2023, causing SPOT stock to fall 14.26%. This fall could coincide with the low of May 3, 2023. Experts argue that the fall could be attributed to economic headwinds and the company’s decision to axe podcasts, job cuts, and mask the record number of new users who signed up during the quarter.
Spotify Technology S.A. (SPOT) Stock: Financial Analysis
During the COVID-19 pandemic, Spotify invested heavily in podcasts, considering it to be a revenue generator. The decision started to pay off slowly, but the company decided to retract as investors grew impatient. In the next three months ending in June 2023, the overall losses were recorded at around $334 Million. In the same period last year, they were around $138.33 Million.
Spotify had to cancel many original podcast shows over the year and more than a few true crime series during the recent quarter. It also had to merge its Gimlet and Parcast studios. However, the monthly users’ number was up by 27% to 551 Million, while subscribers grew 17% year-over-year (YoY) to 220 Million.
Spotify Technology S.A. (SPOT): Technical Analysis
At press time, SPOT stock is trading at $140.38 with a massive fall of 14.26%. The previous close and open were at $163.72 to $150.10, respectively. The 52-week range is from $69.29 to $182.00, respectively.
This indicates that a strong push would be needed to propel the price to new highs. With a volume of 14.59 Million shares, the market cap is $27.152 Billion.
The trailing twelve-month (TTM) earnings per share (EPS) is negative $4.58, indicating weakness. Analysts placed a 2.67 rating for moderate buy and estimated a price target at $160.64 with a 14.8% upside.
Spotify reported its Q2 earnings on July 25, 2023, where the reported revenue of $3.465 Billion failed to beat the estimated value of $3.5 Billion by 1.00%. The -$1.691 miserable reported earnings could not surpass the expected value of -$0.689 by a whopping 145.55%.
Revenue gained 11% (YoY) to $3.16 Billion, while the (TTM) revenue stands at $12.11 Billion. The revenue per share (TTM) is $62.67, and the (YoY) quarterly revenue growth is up by 14.30%. Spotify expects its Q3 revenue to be around $3.65 Billion.
The adjusted gross margin is around 25.5%, and the (TTM) gross profit is 2.93 Billion. At the same time, the adjusted operating loss is $123.95 Million, while the (TTM) operating margin is down by 6.24%.
Spotify Technology S.A. (SPOT) Stock: Candle Exploration
The severe drop after the recent earnings announcement caused the growing streak to break. This drop brought the current stock price closer to the ascending EMA. Though EMA’s trajectory hints at a jump, RSI saw a steep decline and is at 31.09, foreshadowing a further drop.
The price should bounce off EMA; if not, it shall test S1 at $114.90 before dropping further to S2 at $71.54. For some time, the share price would oscillate in the expected range. Positive momentum can be seen if the price breaks immediate resistance at $159.43. Then, it could eventually break R1 at 180.91 and R2 at $206.38.
Disclaimer:
The views and opinions stated by the author, or any people named in this article, are for informational purposes only and do not establish financial, investment, or other advice. Investing in or trading crypto assets and stocks comes with a risk of financial loss.
Adarsh Singh is a true connoisseur of Defi and Blockchain technologies, who left his job at a “Big 4” multinational finance firm to pursue crypto and NFT trading full-time. He has a strong background in finance, with MBA from a prestigious B-school. He delves deep into these innovative fields, unraveling their intricacies. Uncovering hidden gems, be it coins, tokens or NFTs, is his expertise. NFTs drive deep interest for him, and his creative analysis of NFTs opens up engaging narratives. He strives to bring decentralized digital assets accessible to the masses.
