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Research Alert: CFRA Lowers Rating On Shares Of Spotify Technology S.a. To Hold From Buy

· 02/04/2021 18:44

11:40 PM EST, 02/04/2021 (MT Newswires) -- CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:

We lower our rating to Hold from Buy but raise our target by USD28 to USD310 after mixed Q4 '20 results, in our view. Revenue grew 17% Y/Y, recovering only modestly from lower Y/Y growth due to Covid-19 in Q2 (+13%) and Q3 (+14%), vs. a 3-year revenue CAGR of 32% from '16 to '19. There was a continued strong Monthly Active User (MAU) growth, +30% Y/Y for ad-supported MAUs and +24% for paying subscribers, with especially robust growth again in India. Operating expenses were higher than expected and guidance for FY 21 was somewhat tepid. Our target price is the product of our new revenue forecast for '22 of EUR12.4B, down from EUR13.2B, and a 3.9x multiple (2-year mean, less 5% due to history of IFRS losses), converted to U.S. dollar. Revenue of EUR2.17B grew 17% Y/Y but missed consensus by EUR13M, while an EPS loss of EUR0.66, EUR0.48 higher vs. Q4 '19, missed by EUR0.14. We lower our EPS forecasts for '21 by EUR1.96 to a loss of EUR1.27 and for '22 by EUR2.16 to a loss of EUR0.14, and we start '23 at EUR1.17.