Spotify Valuation. A May 2020 Update

Dear Reader,

Spotify Technology SA, the digital music service, is trading at 34.6 billion USD market capitalization currently.

I believe Spotify is worth around 60 billion USD or nearly double its current valuation.

Why? Spotify made 6.76 billion in revenue in 2019, an approximately 29% year on year revenue growth. In 2019 Spotify's net profit margin was a negative 2.7%. So Spotify is nearly profitable and growing its revenue very fast.

All this makes for my case that Spotify is worth 60 billion USD. Video and music streaming is the hot new mega trend. And Spotify is perfectly positioned to benefit from consumers shifting to watching and consuming more video and music online. Yes, there are many competitors in streaming, but in digital music streaming Spotify is an unquestionable leader. All these facts, make a strong case that Spotify is grossly undervalued by the public markets. One reason for this are perhaps the losses Spotify made in previous years.

But as can be plainly seen this is on the mend and Spotify is on the road to become a fast growing, mildly profitable corporation in the hot sector of video streaming.

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Petar Vladimirov Posledovich is not liable for any investment losses incurred by reading and interpreting blogposts on this blog and posts on social networks.

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Respectfully yours,

Petar Posledovich