Jim Cramer Says High Price to Earnings Multiples Are Hurting Spotify Stock

I person been watching the banal conscionable shed points and shed points and shed points arsenic the Street turns connected it due to the fact that it sells astatine a precise precocious price-to-earnings multiple. People nary longer similar the precocious price-to-earnings aggregate stocks close now. We person to obey that and ticker it travel successful and ain it for the agelong word oregon merchantability it and travel backmost later, which whitethorn beryllium the mode that I would attack Spotify.

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Spotify Technology S.A. (NYSE:SPOT) provides audio streaming services. It lets users perceive to euphony and podcasts either done ad-free subscriptions oregon free, ad-supported access. TCW Concentrated Large Cap Growth Fund stated the pursuing regarding Spotify Technology S.A. (NYSE:SPOT) successful its 3rd 4th 2025 capitalist letter:

Spotify Technology S.A. (NYSE:SPOT) (SPOT; Communication Services; 1.21%**) – Headquartered successful Sweden, Spotify is the starring audio streaming subscription work with a assemblage of astir 700 cardinal monthly progressive users, and implicit 275 cardinal paying subscribers. The institution controls ~1/3 of the planetary euphony streaming market, providing SPOT with standard to negociate with euphony labels during pricing negotiations. The institution manages its concern successful 2 segments: premium (~90% of revenues) and ad-supported (~10% of revenues). After not raising prices for implicit a decade, the institution has precocious begun to instrumentality terms with constricted interaction to lawsuit churn. We judge SPOT has galore levers to propulsion to accelerate growth, including adding caller users, converting ad-supported users to premium subscribers, and terms increases. We are attracted to the company’s standard successful a secularly increasing marketplace and judge the existent stock terms does not adequately bespeak the longer-term currency travel procreation imaginable of the business.

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