Is Spotify Stock a Buy?
Media-streaming specialist Spotify Technology (NYSE: SPOT) is hardly setting the investing world on fire these days. The stock is trading 38% below February's all-time highs, having lost 19% of its market value over the last three months. Should investors load up on Spotify shares at these lower prices, or is the stock losing value for a good reason?
The growth engines under Spotify are running smoothly so far. In the first quarter of fiscal year 2021, total monthly active users (MAUs) rose by 24% to 356 million accounts. The number of premium subscribers increased 21% to 158 million names. Revenue posted a smaller gain of 16%, mostly due to unfavorable currency exchange trends. The average revenue per user (ARPU) fell 7% in dollar terms but came in just 1% lower as measured in constant currencies.
The company expects to add roughly 14 million net new MAUs in the second quarter alongside 6 million premium subscribers. Currency exchange effects should continue to weigh on Spotify's top and bottom lines for the rest of 2021. Still, there is nothing wrong with Spotify's customer growth charts.
Source Fool.com
