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Spotify IPO - Investment Case Presentation (FREE SAMPLE REPORT)

Research

Publication Date: 20 Sep 2018 - By Robert Prather By Robert Prather
Actionable
Differentiated

IPO & Placements Equity Fundamental Equity USA Consumer Technology

Spotify Technology (SPOT)

Industry:

Communications

Market Cap:

Estimated between $10bn and $20bn

Projected Price:

No Primary Shares Being Sold

Spotify is the world's largest and most popular music streaming service. It is a two-sided music marketplace for users as well as artists, which is powered by data, analytics and software. It was founded in 2006 and is headquartered in Stockholm, Sweden. It currently operates in 65 countries with over 159mn users, including 71mn premium subscribers which is estimated to be nearly double that of Apple Music. The company's global streaming market share was approximately 42% in 2016.

Strengths & Opportunities

  • Steady revenue and MAU growth
  • Premium subscriber base growing
  • Premium churn rate declining
  • Users spending more time on Spotify platform
  • Improving margins and cash flows
  • Secular tailwinds in the industry

Risks & Concerns

  • Decelerating revenue growth
  • User growth slowing
  • Declining ARPU
  • Increasing costs of customer acquisition
  • Crowded industry
  • No product differentiation
  • Increasing competition from Apple Music

Spotify IPO

Source: VR Fundamental

Pages: 46

Released: 20 Sep 2018

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The Author

Robert Prather

Equity Analyst

Industrials, Consumer, Telecom & Media, Technology

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