Christoffer Jennel has published a pre-earnings report on Spotify, which will release its Q4 results on February 10. 
Spotify reports its Q4 results on Tuesday, February 10, before the market open. We do not expect major surprises regarding revenue and user metrics. However, we expect operating profit to exceed guidance, due to lower social costs resulting from the weakness in the share price during Q4. Following the recent price hike in the US and previous international increases, we expect investors to focus on management’s comments regarding churn, subscriber growth, and the broader pricing strategy leading up to 2026. In our view, the decline in the share price has significantly improved the valuation profile, and Spotify is now trading below our acceptable valuation ranges (EV/FCFF 26’: 23x, EV/EBIT: 28x, EV/GP: 12x). As the company’s fundamentals remain intact in our view, we are now more positive about the stock and see attractive risk-adjusted upside from current levels. We are therefore upgrading our recommendation to Accumulate (prev. Reduce), but lowering our target price to $590 (prev. $655) to reflect what we believe are lower justified valuation multiples due to the contraction of peer multiples.