Monness, Crespi, Hardt reaffirmed a Neutral rating on Spotify (SPOT) after the streaming company released fourth-quarter 2025 results that outperformed consensus. The stock is trading at $478.50 and has declined roughly 12.5% over the past week.
Spotify’s fourth-quarter performance surprised to the upside on earnings, and management presented what analysts described as a reasonable early-2026 outlook. For the first quarter of 2026, the company guided to revenue of 4.5 billion, operating income of 660 million, and a gross margin of 32.8%.
Alongside its results and guidance, Spotify raised prices on its U.S. subscription tiers in January 2026. The revised pricing set the Individual plan at $12.99 (up from $11.99), Duo at $18.99 (up from $16.99), Family at $21.99 (up from $19.99), and Student at $6.99 (up from $5.99). These increases follow an earlier adjustment in June 2024.
Following the quarterly release, Monness adjusted its 2026 estimates for the company. The firm trimmed its revenue forecast to 19.321 billion from a prior 19.599 billion, reflecting an expected 12% year-over-year increase. At the same time, Monness raised its 2026 earnings-per-share projection to 13.75 from 12.08.
Spotify’s recent operating trajectory aligns with the analyst house’s growth assumptions; the company’s revenue expanded by 11.9% over the last twelve months. Monness also noted that Spotify outpaced its coverage in 2025, with a stock gain of about 30% that year.
Despite the strong 2025 return, shares have faced selling pressure in 2026. The research firm highlighted several ongoing concerns - intense competition in the streaming and digital-advertising markets, relatively thin margins, and difficult macroeconomic conditions - as factors weighing on investor sentiment.
Valuation and balance-sheet metrics cited by the firm include a price-to-earnings ratio of about 60. The company’s financial position was described as sound: it holds more cash than debt and received a financial health grade characterized as "GOOD."
Q4 results and analyst reactions
Spotify reported an adjusted earnings per share of 4.43 for the fourth quarter of 2025, well above the consensus estimate of 2.85, representing a 55.44% surprise. Quarterly revenue was reported at 4.5 billion, described in the company release as slightly above the expected 4.52 billion.
Following the results, a range of brokerages updated targets and ratings. Evercore ISI lowered its price target to $700 while retaining an Outperform rating. Jefferies trimmed its target to $650, maintaining a Buy stance and noting supportive gross margin guidance. Canaccord Genuity moved its target to $750, pointing to a record addition of 38 million monthly active users. Raymond James set a $620 target and highlighted that Spotify’s first-quarter 2026 guidance exceeded forecasts.
What this means for markets and sectors
Spotify’s results and guidance carry implications for several areas: the consumer digital subscription segment, the broader streaming and audio media market, and the digital advertising ecosystem. Price increases on subscription plans will be watched for their impact on user churn and average revenue per user. Advertisers and ad-tech participants will monitor the company’s gross margin and operating-income trajectory in the context of ad market conditions.
Monness’ Neutral rating reflects a balance between upside from pricing and margin improvements and downside from competitive and macro risks. The firm’s simultaneous reduction to revenue expectations and lift to EPS estimates indicates an outlook that anticipates higher profit per share even with slightly lower top-line assumptions.