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Friday, January 27, 2023

Spotify (NYSE: SPOT) Stock is Skyrocketing Today. Here’s Why

Shares of Spotify Technologies S. A. (NYSE: SPOT) skyrocketed 4.19% during the pre-market trading session of Tuesday. The positive performance of the firm’s stock has highlighted that the investors are optimistic about the investment in the firm after the analyst Justin Patterson gave the green signal to invest in the digital music service.

KeyBanc Capital analyst Justin Patterson disclosed that it is time to purchase into the digital music service. He disclosed more evidence to indicate its business is in a stronger position and “convincing” valuation. Patterson has raised his rating to overweight from sector weight. He has maintained a rating of $340.

Furthermore, Patterson revealed that he didn’t suggest buying Spotify’s stock over the past year because of fears over consumer price elasticity, competition, and anticipation around podcast returns. Since then the industry has shown some positive news.  Spotify seems to be rising faster than YouTube Premium. Patterson predicts that Spotify will have about 22 million net subscriber additions over the same time that YouTube had 15 million net subs adds.

Additionally, it has also been disclosed that Spotify has experienced an increase in its ranking. Patterson stated that he discovered that Spotify’s subscriber resilience resembles that of Netflix Inc. Moreover, Patterson also revealed he also thinks Spotify’s subscribers are worth approximately 25% that of a Sirius XM Holdings Inc. subscriber. And while he was convinced that some discount is guaranteed, investors are underestimating Spotify’s progress with price increases.

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