Spotify is a dominant, underappreciated monster business
The bull case argued for Spotify is that its massive, highly sticky premium subscriber base and strong financial metrics are not getting enough credit from the market.
The argument
The hosts argued that Spotify is one of the last services consumers would ever cancel, highlighting its 293 million premium subscribers and expanding gross margins. Despite a competitive landscape for podcast talent with YouTube and Netflix, Spotify's business continues to hum with double-digit revenue growth.
The thesis, stress-tested
✓ What validates it
- ✓Premium subscriber growth exceeding Q1 guidance of 293 million
- ✓Continued gross margin expansion above 33.1%
▸ Risks discussed
- ▸High valuation at roughly 60 times earnings
- ▸Intense competition for video and podcast content from Netflix and YouTube
- ▸Regulatory hurdles in Europe preventing potential acquisitions
Hear it yourself
"But YouTube is it's a three way fight now for, podcast talent, and Netflix is spending money and pulling shows off of YouTube. They are showing some of the shows that Netflix has brought on continue to show video on Spotify, but it's just like it's a fight now."
00:00 / 00:21
AFFILIATE LINK · ZORTIX MAY EARN A COMMISSION · NEVER A RECOMMENDATION TO TRADE