Why Spotify Is Cheaper Than You Think
Spotify (NYSE: SPOT) looks like another richly valued tech stock, but it's a lot cheaper than you think. Here's why: It has an enormous addressable opportunity ahead, it is by far the most well-positioned company to capture that opportunity, and it is expanding into more profitable revenue streams. None of that appears widely accepted by the market, but I think it is only a matter of time.
Spotify has 271 million monthly average users (MAUs), including 124 paying Premium subscribers. That is a huge number already, but Spotify is still only scratching the surface. The number of internet-enabled smartphones is a relative proxy for Spotify's addressable opportunity, and there are over 3 billion of them in territories where Spotify operates or intends to operate over time. And that figure should only grow as smartphone penetration continues.
Spotify founder and CEO Daniel Ek recently discussed the company's long-term opportunity on the Invest Like The Best podcast. He said:
Source Fool.com
