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SPOT Stock Down 8% Yesterday, Spotify Reports Wider Than Expected Q4 Loss

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by Steve Muchoki · 2 min read
SPOT Stock Down 8% Yesterday, Spotify Reports Wider Than Expected Q4 Loss
Photo: Unsplash

During the past three months that ended in December, Spotify paying subscribers saw a huge leap to close the year on a positive note.

Spotify Technology SA (NYSE: SPOT) stock closed Wednesday trading at $317.25, after dropping approximately 8.06% during the day. Meanwhile, Spotify stock jumped approximately 1.02% during the premarket trading session.

Yesterday’s volatility on Spotify (SPOT) stock was attributed to the mixed quarterly earnings results released by the company. During the fourth quarter, the company lost 66 cents per share, compared to the 55-cent loss expected by analysts surveyed by Refinitiv. Revenue came in at $2.17 billion which slightly surpassed the expected $2.15 billion. Spotify said premium subscribers jumped 24% year over year.

Spotify stock enjoyed a profitable 2020 as the shares jumped approximately 105.51%. Besides, Spotify stocks are up approximately 23% in the past three months, despite the pandemic. However, they have dropped around 4.26%, and 2.52% in the past one month and five days respectively according to metrics provided by MarketWatch.

The Swedish audio streaming and media services provider saw a great reception as more people obeyed the stay-at-home order to avoid contracting the coronavirus. However, Spotify stock shareholders and analysts are wary of the upcoming quarters as a viable coronavirus vaccine may be approved thus ensuring our normalcy back.

With Spotify stocks having jumped significantly over the past twelve months, Spotify’s market capitalization rose exponentially and currently stands at $63.49 billion. Notably, the company has 187.04 million outstanding shares with approximately $3.87 million short interest according to data provided by MarketWatch.

Having reported its fourth quarter, analysts now have a better viewpoint to analyze Spotify stock. According to a survey done by MarketWatch, Spotify stock received an average of a Hold rating from 29 ratings.

SPOT Stock and Spotify Q4 Earnings Results

During the past three months that ended in December, Spotify paying subscribers saw a huge leap to close the year on a positive note. Notably, Spotify added 11 million paying subscribers during the 2020 fourth quarter to close the year with approximately 155 million premium subscribers globally.

Another positive note during the fourth-quarter earnings was that the company also reported 345 million total monthly active users, up 27% year over year. The figure beat analysts’ expectations, whereby they expected it at 344 million.

Forward, Spotify stock remains heavily underpinned by how the company does during the first quarter in respect to the given guidance. Spotify expects to lose the equivalent of $63.6 million on sales of $2.51 billion in the first quarter. On the other hand, the company forecast losing the equivalent of $300 million on sales of $11.06 billion yearly.

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Steve Muchoki

A financial analyst who sees positive income in both directions of the market (bulls & bears). Bitcoin is my crypto safe haven, free from government conspiracies. Mythology is my mystery! "You cannot enslave a mind that knows itself. That values itself. That understands itself."

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