Key Takeaways
- Spotify shares rose Friday for a record tenth straight session.
- The stock also finished the day at its first record high since February 2021.
- KeyBanc analysts said this week that recent comments from Universal Music Group could mean their projections for Spotify’s subscriber growth could be too conservative.
Spotify (SPOT) shares rose for a tenth straight session on Friday, ending the day at their first record close since February 2021.
The streaming music company’s shares ended the day up 1.3% at $364.85, surpassing by less than half a dollar their previous high close of $364.59. The stock is up more than 90% this year.
Analysts this week expressed optimism about Spotify’s growth potential. KeyBanc Capital Markets analyst Justin Patterson, for example, used recent comments from a Universal Music Group (UMG) investor day to project Spotify’s future subscriber numbers.
What UMG’s Estimates Could Mean for Spotify
UMG recently projected that the industry consensus of 1 billion audio streaming subscribers by the end of 2028 could be “too conservative” given under-estimations in previous projections, Patterson wrote this week.
The analysts have forecast Spotify will reach 353 million subscribers by the end of 2028, commanding a global market share of 35%. However, UMG streaming metrics suggest Spotify’s market share is already 35%, meaning KeyBanc’s current estimates imply no market share growth for the streaming leader.
And if UMG is correct that total streaming subscribers will exceed 1 billion in 2028, current targets assume Spotify will lose share. “This strikes us as conservative given product innovation,” the analysts wrote. “With audiobooks providing support to pricing growth, we believe it is reasonable for Spotify to continue outpacing industry growth.”
Despite noting their estimates appear too conservative, KeyBanc analysts did not provide updated subscriber forecasts.
A 10-session winning streak for Spotify’s stock is the longest in the company’s history, according to Dow Jones Market Data and FactSet.