We believe now is a pretty good time to analyze Spotify Technology SA (NYSE: SPOT) it seems that the company is about to perform well. Spotify Technology SA, together with its subsidiaries, offers audio streaming services worldwide. With a recent loss of $ 581 million, many investors are wondering how quickly Spotify Technology will turn a profit, with the big question being, “When will the company break even?” In this article we look at expectations for the company’s growth one and when analysts expect it to be profitable.
Check out our latest analysis on Spotify technology
25 of American Entertainment’s analysts agree that Spotify technology is about to break even. They expect the company to post a final loss in 2021 before posting a profit of 6.5M in 2022. How fast does the company have to grow year over year to break even that day? Using a best-fit line, we have calculated an average annual growth rate of 65%, which indicates that analysts have a high level of confidence. Should the business grow more slowly, it will become profitable later than expected.
NYSE: SPOT earnings per share growth August 22, 2021
We won’t go into company-specific developments for Spotify technology as this is a high-level summary. However, keep in mind that a high rate of growth is not uncommon in general, especially when a company is in a crisis period of investment.
Before we conclude, there is one issue worth mentioning. Spotify Technology currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in the case of Spotify Technology is 44%. Note that a higher debt obligation increases the risk of investing in the losing company.
Next Steps:
There are important fundamentals of Spotify technology that are not covered in this article, but we have to reiterate that this is just a basic overview. For a more comprehensive look at Spotify Technology, take a look at the Spotify Technology corporate page on Simply Wall St. We have also compiled a list of relevant issues that you should investigate further:
- valuation: What is Spotify Technology Worth Today? Is the future growth potential already factored into the price? The intrinsic value infographic in our free research report helps visualize whether the Spotify technology is currently being mispriced by the market.
- Leadership team: An experienced management team at the top strengthens our confidence in the business – see who is on the board of directors of Spotify Technology and what the CEO’s background is.
- Other high performing stocks: Are there any other stocks that have a proven track record of offering better prospects? Discover our free list of these great stocks here.
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This article from Simply Wall St is of a general nature. We only provide comments based on historical data and analyst projections using an unbiased methodology, and our articles are not intended as financial advice. It is not a recommendation to buy or sell stocks and does not take into account your goals or your financial situation. Our goal is to provide you with long-term, focused analysis based on fundamentals. Note that our analysis may not take into account the latest company announcements or quality material, which may be sensitive to the price. Simply Wall St has no position in the stocks mentioned.
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