2024-04-17 15:07:40 ET
Summary
- Spotify's focus is shifting toward monetization and efficiency, but progress could be difficult without impacting growth.
- The company's expansion into audiobooks is seen as a potential driver of growth and margins, and is likely an important contributor to the recent share price increase.
- While investors are beginning to buy into Spotify's narrative, the company's valuation looks stretched and any missteps are likely to be punished.
I have long argued that a myopic focus on Spotify's ( SPOT ) royalty payments and relatively low gross profit margins has caused investors to underestimate the company's ability to create and capture value. As Spotify is maturing, it's now beginning to pull more of the value levers that it has always had access to....
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Spotify: Expansion Success Is Largely Priced In