As of June 14, 2025, Spotify Technology SA has a Discounted Cash Flow (DCF) derived fair value of $696.96 per share. With the current market price at $710.85, this represents a potential upside of 46.8%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $696.96 |
| DCF Fair Value (10-year) | $0.00 |
| Potential Upside (5-year) | -2.0% |
| Potential Upside (10-year) | 46.8% |
| Discount Rate (WACC) | 5.7% - 8.6% |
Revenue is projected to grow from $15673 million in 12-2024 to $41525 million by 12-2034, representing a compound annual growth rate of approximately 10.2%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2024 | 15673 | 18% |
| 12-2025 | 17850 | 14% |
| 12-2026 | 19916 | 12% |
| 12-2027 | 22682 | 14% |
| 12-2028 | 24833 | 9% |
| 12-2029 | 27459 | 11% |
| 12-2030 | 30276 | 10% |
| 12-2031 | 33383 | 10% |
| 12-2032 | 35960 | 8% |
| 12-2033 | 38922 | 8% |
| 12-2034 | 41525 | 7% |
Net profit margin is expected to improve from 7% in 12-2024 to 23% by 12-2034, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2024 | 1138 | 7% |
| 12-2025 | 1801 | 10% |
| 12-2026 | 2563 | 13% |
| 12-2027 | 3517 | 16% |
| 12-2028 | 4472 | 18% |
| 12-2029 | 5599 | 20% |
| 12-2030 | 6310 | 21% |
| 12-2031 | 7107 | 21% |
| 12-2032 | 7815 | 22% |
| 12-2033 | 8629 | 22% |
| 12-2034 | 9387 | 23% |
with a 5-year average of $42 million. Projected CapEx is expected to maintain at approximately 0% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 12-2025 | 43 |
| 12-2026 | 43 |
| 12-2027 | 59 |
| 12-2028 | 80 |
| 12-2029 | 101 |
| 12-2030 | 112 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 15 |
| Days Inventory | 0 |
| Days Payables | 27 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 9M/2025 | 1675 | 261 | 60 | 193 | 1160 |
| 2026 | 3148 | 496 | 89 | (7) | 2569 |
| 2027 | 4308 | 681 | 101 | (41) | 3567 |
| 2028 | 5474 | 866 | 111 | 109 | 4389 |
| 2029 | 6846 | 1084 | 123 | 31 | 5609 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 696.96 | -2.0% |
| 10-Year DCF (Growth) | 0.00 | 46.8% |
| 5-Year DCF (EBITDA) | 470.24 | -33.8% |
| 10-Year DCF (EBITDA) | 731.25 | 2.9% |
Is Spotify Technology SA (SPOT) a buy or a sell? Spotify Technology SA is definitely a buy. Based on our DCF analysis, Spotify Technology SA (SPOT) appears to be fairly valued with upside potential of 46.8%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider a hold at the current market price of $710.85.