Canaccord Genuity lowered its one-year price target on Spotify (NYSE:SPOT) to $750.00 from $850.00 on Tuesday, while maintaining a Buy rating on the music streaming company. The research note comes after Spotify reported results for the fourth quarter and offered initial guidance for the first quarter of 2026.
Spotify added a record 38 million monthly active users (MAUs) in Q4, and the company posted an acceleration in year-over-year revenue growth. The firm attributed much of the user expansion to the annual Wrapped campaign, which delivered a 20% year-over-year increase in engagement. Over the last twelve months, Spotify recorded total revenue of $19.84 billion, representing growth of 11.89%.
On the valuation front, the stock is trading at $478.84 and carries a price-to-earnings ratio of 60.29. Year-to-date, the share price has declined by -28.56%, per InvestingPro data cited by analysts.
Looking ahead, Spotify's Q1 outlook showed MAU projections roughly 1% ahead of consensus estimates, while Premium subscriber trends were in line with expectations. Revenue guidance for the quarter came in modestly below consensus, a shortfall the research firm specifically linked in part to accelerating foreign exchange headwinds compared with the prior quarter.
Canaccord noted management's expectation that recent price increases will help the company outpace content cost growth in 2026, supporting gross margin expansion across the year. Management also addressed investor concerns about artificial intelligence, stating that AI is expected to bolster Spotify's data advantage and create new monetization pathways for artists.
The research firm wrote that, notwithstanding recent moves in the share price, Spotify's valuation still appears attractive in their view and may understate the durability of the company's platform within the music industry.
Additional reported results for the fourth quarter of 2025 showed an earnings per share of E4 4.43, substantially higher than the E4 2.85 forecast and representing a 55.44% earnings surprise. Quarterly revenue reached E4 4.5 billion, slightly above the anticipated E4 4.52 billion. Following Spotify's report, Raymond James adjusted its price target on the stock from $730 to $620 while keeping an Outperform rating, a change made despite first-quarter 2026 guidance that exceeded forecasts in areas including gross margin.
These developments collectively signal positive momentum in some financial metrics and user engagement, even as currency pressures and content cost dynamics weigh on near-term revenue guidance.
Key points
- Canaccord lowered its Spotify price target to $750 from $850 but kept a Buy rating - impact on equity research and investor sentiment in technology and media sectors.
- Spotify reported a record 38 million MAU additions in Q4 and saw a 20% year-over-year increase in Wrapped engagement; last twelve months revenue was $19.84 billion, up 11.89% - material to the streaming and digital media market.
- Q1 guidance showed MAUs ~1% above consensus while revenue guidance was modestly below estimates, reflecting accelerating foreign exchange headwinds - relevant to corporate revenue forecasting and cross-border exposure.
Risks and uncertainties
- Foreign exchange headwinds - the firm explicitly links softer revenue guidance to accelerating currency pressures, which could impact reported revenue for companies with significant international operations.
- Content cost growth versus pricing - management expects recent price increases to outpace content cost growth in 2026, but the balance between pricing and content expense remains an uncertainty for margin recovery.
- Investor concerns about AI - while management expects AI to enhance Spotify's data advantage and monetization options, investor apprehension about AI's impact on the business model was acknowledged.