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SPOT dips below $600 for the first time since April amid a turbulent market. But analyst consensus remains strong even with a Goldman Sachs downgrade.
Today, Spotify stock (SPOT) shares dropped below $600 for the first time since April, ending the day at $589.23. That’s due in part to overall market turbulence, which makes even traditionally bullish stocks like SPOT more vulnerable. Analyst consensus on SPOT remains strong despite the recent Goldman Sachs downgrade. But there are other factors at play here.
For starters, SPOT clocked a previously high Price-to-Earnings (P/E) ratio compared to its industry peers—which can become a major issue if quarterly results aren’t gangbusters. Spotify is also showing some difficulty in achieving rock-solid, quarter-after-quarter profitability, despite hitting the mark many times previously, including in the most recent quarterly report.
Ad-supported revenues have also been a point of concern, as well as questions surrounding whether Spotify can seriously and repeatedly hike prices in markets like the U.S.—especially as its biggest competitor, Apple Music, maintains lower prices.
Meanwhile, Spotify has been busy making moves. The company announced built-in integration with TuneMyMusic today. TuneMyMusic is an external service that makes it easier for listeners to move playlists and other aspects of their music library between most major platforms.
Yesterday (November 19), Spotify also announced the acquisition of WhoSampled, the community-run database tracking sampled music. The streaming service shared the news as part of its announcement about its new song credit features, such as SongDNA, which is powered by the integration with TuneMyMusic.
According to WhoSampled, the company’s stand-alone platform and brand will remain, and it expects to offer some user-facing improvements as it transitions into Spotify’s larger business. For example, the company said moderation times for submissions would be sped up, and mobile apps would become free downloads with free subscriptions.
WhoSampled actually partnered with Spotify back in 2016 to allow users to access their Spotify playlists and saved tracks in the WhoSampled app, but the new acquisition takes things another step further. Deal terms were not disclosed, but Spotify confirmed that the acquisition is for both the WhoSampled team (around 10 employees) and its database.
