Spotify stock (NYSE: SPOT) has suffered an almost 69 percent valuation dip since 2022’s beginning, raising questions about shares’ path forward in the new year.
When the market closed today, Spotify stock was worth $76.61 per share, representing the aforementioned 68.62 percent falloff since 2022 began as well as a small increase from yesterday’s day-end value.
Of course, it’s been a decidedly difficult year for the wider market and particularly high-profile tech and entertainment stocks including Meta (down 65.85 percent from 2022’s start), Snap (down 81.65 percent), and Netflix (down 53.65 percent).
Especially because Spotify stock was riding high when the year kicked off – as financial professionals were setting correspondingly large SPOT target prices – many investors are now speculating about shares’ outlook in 2023. Needless to say, the trajectory of the wider economy, including the much-discussed possibility of a recession, is factoring heavily into these discussions.
But the operational specifics of Stockholm-headquartered Spotify, which is gunning for podcasting profitability as well as a staggering $100 billion in annual revenue, are for obvious reasons also driving the talks.
Morgan Stanley set a SPOT target price of $105 (a close to 37 percent boost from the present worth) earlier this month, and certain investment firms remain extremely optimistic about Spotify’s perceived long-term potential as something of a one-stop destination for audio entertainment.
And on this front, the streaming giant formally launched audiobooks (on the heels of a 2021 test) in the States in late September, indicating at the time that the rollout marked “just the beginning of Spotify’s audiobooks journey.” In November, higher-ups brought the offering to the UK.
Meanwhile, besides continuing to tout its live-audio options, Spotify is evidently working to cut expenses in the podcasting space, where it’s dropped billions in recent years as part of a wider effort to move beyond music’s razor-thin margins. Execs have made multiple layoffs across Spotify’s podcast units in 2022, for instance, and a number of original programs have been axed.
In 2023, it’ll be interesting to see how these reductions, non-podcasting layoffs, a hiring slowdown, and a presumed pivot from massive acquisitions will impact Spotify’s financials and stock value. The business said that it had 456 million monthly active users as of Q3 (up 20 percent year over year and five percent quarter over quarter), including 195 million paid subscribers (up 13 percent YoY and four percent QoQ).
Despite the improvements as well as €3.04 billion in quarterly revenue (up 21 percent YoY), Spotify likewise identified a Q3 operating loss of €228 million. The company is scheduled to post its fourth-quarter results before the market opens on January 31st.