Name of opportunity: 👀
Spotify Technology SA
Deluxe subscription: 💎
A source close to the company who has not revealed their name said the new ‘Supremium’ plan will be available to users as an add on to their existing plan, at a cost of at least US$5 more a month. The exact cost may depend on which subscription plan the customer is using. The plan will offer high-fidelity audio, which Spotify have been talking about since 2021, as well as new playlist creation features.
How hot is this investment opportunity? 🔥🔥🔥
Analysts are excited about the launch of the new tier, as the higher price will likely bring in more revenue for Spotify, which would be great news for shareholders. Growth for Spotify would inspire confidence that the company will continue to grow and innovate with new products like this upcoming subscription tier, and continue to find more ways to make money. The fact that the new tier is not an overall price hike and is instead a new opt-in offer for existing users has reassured analysts that it should not reduce Spotify's current customer base.
Analysts predict that Spotify might increase in value by 9.93% over the next 12 months, from $315.49 to $346.83. If you invested $1000, you might profit $99.34. One reason for this prediction is the ‘Supremium’ price tier. Another is that Spotify’s Q1 earnings release back in April suggested that the company was doing well, with a record quarterly profit and higher than expected earnings per share and revenue. This has boosted investors' interest in Spotify as a company. Last quarter, its premium subscriber base grew by 14% year-over-year to 239 million users, indicating that the number of people willing to commit to a paid subscription to Spotify is continuing to grow - could this willingness to spend extend to the new tier?
Listen to the music: 🎶
We have previously profiled Spotify on Hot Stocks, when the company’s stock rose in response to a planned price hike across 5 markets. The well known company was founded in Sweden in 2008, where its headquarters remain today, and is now legally domiciled in Luxembourg. It’s a very popular streaming service with 615 million users worldwide. Over the last year, Spotify has undergone a process of streamlining including laying off 17% of the company in December 2023 in pursuit of profitability.
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