Spotify Earnings Up Next
On the back of two consecutive quarters of earnings declines, Spotify is in focus today. The company is due to report Q4 results with Wall Street looking for an adjusted loss per share of -$1.35 on revenues of $3.391 billion. Spotify suffered sharply over 2022, losing more than 60% of its share value. While we’ve seen a recovery so far this year, in line with the broader tech recovery linked to US rate-path expectations, today will show whether fundamentals at the company are worth getting behind this year.
Gross Margins in Focus
The big focus for traders will be the company’s gross margins which have been declining recently. It was the drop in Q3 gross margins which caused shares to tank more than 10% in reaction to the results. Market forecasts are for gross margins in the 24.5% region. Anything below this might well fuel a similar reaction today. Recent layoffs at the company should help underpin margins, however.
Price Increases & Subscriber Number
Looking ahead, traders will be keen to hear about any potential plans to hike the price of premium services. Spotify recently said that it was considering such a move, in line with Apple and Youtube. Subscriber growth will also come under the microscope with consensus calls for 7 million in new premium accounts and overall active users of 478 million. Any undershooting of these figures might again see Spotify shares firmly lower.
Technical Views
Spotify
The rally in Spotify shares off the 2022 lows has seen the market breaking out above the bear trend line and above the 91.36 level. This is a key technical development and while above here the focus is on a further push higher towards the next big hurdle at 113.84. Bulls will need to see a break of this level to establish momentum for a fuller reversal higher.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.