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Research Alert: CFRA Reiterates Buy Opinion On Shares Of Spotify Technology S.a.

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CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:

Following SPOT's first investor day in four years, we raise our target by USD50 to USD550 using a forward EV/EBITDA of 32.8x compared to the three-year historical average of 30.3x. SPOT sets a 2030 goal of 1B subscribers, USD100B revenue, and 40%+ gross margin. Our target is also supported by our DCF, where we have increased our assumptions for EBIT driven by mid-teen revenue growth through 2030 and expected 35%-40% gross margins (from 32% in 2025) and operating margins above 20% from 13% in 2025. Higher growth inputs should lead to stronger free cash flow each year. Besides healthy subscriber growth for premium and ad-pay plans, SPOT defined other strategic pillars to drive growth. They include power law monetization with add-ons like Audiobooks Plus, which already has 1M+ users, new music remix, and cover features with Universal Music Group; AI/Generation with a "Large Taste Model", personal podcasts, prompted playlists, and Studio Labs; and reserved ticketing with Live Nation as a new complimentary service.

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