Shares of Spotify Technology (SPOT) neared an all-time high Monday after the streaming music leader received a bullish report from a Wall Street analyst. Spotify stock jumped on the report, but gains faded near the close.
Monness Crespi Hardt analyst Brian White initiated coverage of Spotify stock with a buy rating and a price target of 265. Spotify stock rose 1.2% to 194.69 on the stock market today. Earlier in the session, it climbed as high as 196.95.
Spotify went public on April 3, starting at 165.90. Shares hit a record high of 198.99 on July 26.
“Given Spotify’s strong growth trajectory, subscription-based model, solid financial position, global reach, expanding brand recognition and the No. 1 position in the early stages of the rapidly growing music streaming market, we believe investors will continue to gravitate toward the stock over the next 12 months,” White said in a report to clients.
Spotify is the world’s top streaming music service. It had 180 million monthly active users and 83 million paying subscribers as of the end of June. White forecasts Spotify reaching 276 million monthly active users and 150 million premium subscribers in 2020.
Spotify Stock And The ‘Triple A’s’
The Stockholm-based company competes with the likes of Amazon (AMZN), Apple (AAPL) and Alphabet‘s (GOOGL) Google by offering music lovers a differentiated experience, White said. He calls those much-larger rivals the “Triple A’s.”
Apple Music is the second-largest streaming music service. At the end of July, it had more than 40 million paid subscribers and over 50 million total subscribers, including those on free, three-month trials.
Unlike Apple Music, Spotify offers a free, advertiser-supported service tier. It uses that tier to develop paying subscribers.
“Spotify has been hard at work over the years developing an intelligent music streaming platform that leverages proprietary artificial intelligence (AI) and machine learning (ML) tools that tap into massive data sets that have grown to over 200 petabytes,” White said. “These oceans of data offer valuable insights into content consumption and user behavior, improving the value of the platform.”