Spotify Technology is the IBD Stock Of The Day as the streaming music giant unwraps a nice rebound off a key support level.
On Thursday, Spotify stock bounced off its 50-day moving average line in a bullish sign. The stock is actionable after clearing a nearly monthlong downtrend and its 21-day line, based on IBD analysis.
Spotify stock needs another week to form a flat base, which would have a buy point of 506.47, according to IBD MarketSurge charts. That entry point is also the stock's all-time high, reached on Dec. 4.
Spotify stock ended the regular session Thursday up 2.3% to close at 457.79.
On the stock market today, Spotify climbed 1.9% to close at 466.69.
On Thursday, Spotify announced that it will release its fourth-quarter results on Feb. 4. Analysts polled by FactSet expect the audio entertainment service to earn $2.07 a share on sales of $4.25 billion in the December-ended quarter. In the year-earlier period, it lost 39 cents a share on sales of $3.94 billion.
Analysts see Spotify adding 7.9 million premium subscribers in Q4, bringing its total to 259.9 million worldwide.
Plus, Wall Street is modeling Spotify to end 2024 with 664 million total monthly active users. Spotify offers an ad-supported service in addition to its commercial-free subscription service.
Spotify Stock Called A 'Top Pick'
Morgan Stanley analyst Benjamin Swinburne calls Spotify stock a "top pick" for 2025. He rates it as overweight, or buy, with a price target of 550.
Swinburne likes Spotify for its market-leading position and for turning profitable in 2024.
"We remain overweight (on Spotify stock) due to continued conviction in: 1) Spotify's best-in-class product offering and related pricing power; 2) continued runway for user growth; and 3) management's commitment to financial discipline and driving profitability," Swinburne said in a Dec. 18 report.
BofA Securities analyst Jessica Reif Ehrlich also labels Spotify stock as a "top pick" this year.
"We remain bullish on SPOT as they continue to be well positioned to benefit from continued growth in music streaming alongside company specific initiatives (e.g. music tiering/pricing, continued efficiency gains, potential capital returns, etc.)," Reif Ehrlich said in a Dec. 19 report.
She has a buy rating on Spotify stock with a price target of 515.
"Spotify owns the largest streaming music subscription service in the world, controlling a roughly one-third market share of the premium music streaming market," Reif Ehrlich said. "The company is clearly at an inflection point, which is driving outsized share price performance."
Spotify stock is on the IBD Tech Leaders list.
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