Analyst Sees Mature Streaming Market, But Pricing Could Drive Spotify Technology S.A. (SPOT) Growth

We recently published an article titled 8 Up and Coming Streaming Companies and Services. 

In a report released on January 27, MoffettNathanson initiated coverage of Spotify Technology S.A. (NYSE:SPOT) with a Neutral rating and a $487 price target, noting that after more than fifteen years of music streaming adoption, subscriber growth in developed markets appears largely saturated. The firm views the next phase of the industry’s evolution as increasingly centered on pricing, adding that there remains significant room for price-led revenue growth as platforms mature.

Operational execution continues to support this optimistic outlook. During the company’s third-quarter 2025 earnings call, Spotify Technology S.A. (NYSE:SPOT) exceeded expectations across revenue, gross margin, and operating income, reporting total revenue of €4.3 billion and a gross margin of 31.6%. Engagement trends also remain robust, with users streaming video podcasts rising 54% year over year and nearly 500,000 video podcast shows now available on the platform. Together, these metrics underscore Spotify’s ability to monetize its expanding content ecosystem while maintaining operating discipline, reinforcing its long-term growth narrative.

Spotify Technology S.A. (NYSE:SPOT) is a leading global audio streaming platform founded in 2006 in Sweden, offering a broad and increasingly diversified library of music, podcasts, and audiobooks to users across more than 180 countries. The company went public via a direct listing on the New York Stock Exchange in 2018 and has since expanded its platform beyond music into higher-engagement formats, including video podcasts, reinforcing its position as a global leader in digital audio.

TCW Concentrated Large Cap Growth Fund stated the following regarding Spotify Technology S.A. (NYSE:SPOT) in its third quarter 2025 investor letter:

“Spotify Technology S.A. (NYSE:SPOT) (SPOT; Communication Services; 1.21%**) – Headquartered in Sweden, Spotify is the leading audio streaming subscription service with a community of approximately 700 million monthly active users, and over 275 million paying subscribers. The company controls ~1/3 of the global music streaming market, providing SPOT with scale to negotiate with music labels during pricing negotiations. The company manages its business in two segments: premium (~90% of revenues) and ad-supported (~10% of revenues). After not raising prices for over a decade, the company has recently begun to take price with limited impact to customer churn. We believe SPOT has numerous levers to pull to accelerate growth, including adding new users, converting ad-supported users to premium subscribers, and price increases. We are attracted to the company’s scale in a secularly growing market and believe the current share price does not adequately reflect the longer-term cash flow generation potential of the business.”

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