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Spotify (SPOT) to Report Q4 Earnings: What's in the Offing?
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Spotify Technology S.A. (SPOT - Free Report) will release fourth-quarter 2020 results on Feb 3, before the bell.
The company’s earnings surprise history hasn’t been impressive. It delivered a negative earnings surprise of 115.2% in the last four quarters, on average.
Q4 Expectations
The Zacks Consensus Estimate for revenues in the to-be-reported quarter is pegged at $2.55 billion, indicating year-over-year growth of 23.9%. Growth of subscribers and monthly active users (MAUs) is likely to have benefited the top line. However, average revenue per user (ARPU) is expected to have declined due to shifts in both product and geographic mix. Revenues increased 17.4% year over year in the third quarter of 2020.
Gross margin is expected to be higher due to impacts of seasonality. Notably, the metric is comparatively higher in the second and fourth quarters as costs of promotional campaigns are low compared with the first and third quarters. The company is expected to have incurred a loss of 82 cents per share in the to-be-reported quarter. It incurred loss of 68 cents in the third quarter of 2020 and $1.26 in the fourth quarter of 2019.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for Spotify this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Spotify has an Earnings ESP of -15.56% and a Zacks Rank 3.
Here are a few stocks that investors can consider, as our model shows that these have the right combination of elements to beat on earnings this season.
Aptiv (APTV - Free Report) , with an Earnings ESP of +3.53% and a Zacks Rank #2.
Equifax (EFX - Free Report) , with an Earnings ESP of +1.44% and a Zacks Rank of 3.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana. Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
Image: Bigstock
Spotify (SPOT) to Report Q4 Earnings: What's in the Offing?
Spotify Technology S.A. (SPOT - Free Report) will release fourth-quarter 2020 results on Feb 3, before the bell.
The company’s earnings surprise history hasn’t been impressive. It delivered a negative earnings surprise of 115.2% in the last four quarters, on average.
Q4 Expectations
The Zacks Consensus Estimate for revenues in the to-be-reported quarter is pegged at $2.55 billion, indicating year-over-year growth of 23.9%. Growth of subscribers and monthly active users (MAUs) is likely to have benefited the top line. However, average revenue per user (ARPU) is expected to have declined due to shifts in both product and geographic mix. Revenues increased 17.4% year over year in the third quarter of 2020.
Gross margin is expected to be higher due to impacts of seasonality. Notably, the metric is comparatively higher in the second and fourth quarters as costs of promotional campaigns are low compared with the first and third quarters. The company is expected to have incurred a loss of 82 cents per share in the to-be-reported quarter. It incurred loss of 68 cents in the third quarter of 2020 and $1.26 in the fourth quarter of 2019.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for Spotify this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Spotify has an Earnings ESP of -15.56% and a Zacks Rank 3.
Spotify Technology SA Price and EPS Surprise
Spotify Technology SA price-eps-surprise | Spotify Technology SA Quote
Stocks to Consider
Here are a few stocks that investors can consider, as our model shows that these have the right combination of elements to beat on earnings this season.
ManpowerGroup (MAN - Free Report) , with an Earnings ESP of +6.2% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Aptiv (APTV - Free Report) , with an Earnings ESP of +3.53% and a Zacks Rank #2.
Equifax (EFX - Free Report) , with an Earnings ESP of +1.44% and a Zacks Rank of 3.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana. Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot stocks we're targeting >>