Thomas George Spotify Technology SPOT-N COMMENT May 14, 2018

Last week, a few analysts upgraded it. It has pricing power, because it's had no price increases, except one last year from $10 to $11 monthly vs. Netflix by 41% since 2018 and other apps. Also, Spotify earns outside of music including audiobooks and podcasting. 

Bought it 6 years ago. Great product line, the king of music streaming.

It reports this week. But it's making new highs today at a high PE. The bar is set high, delivering 19% revenue growth the last two quarters so the next figure must be higher. Free cash flow is building too and that needs to rise too.

Price increases will increase margins and revenue, keep an eye out for any subscriber churn. Recently reported that margins expanded considerably. Valuation too rich. Not a horrible idea to take some profits. Great product and competitive moat.

Very rich, 12-month price target of $475. What jumps out for him is the management. Lots of competition, but management has executed extremely well. SONO is a bit cheaper, or even Pandora or Deezer.

One of the stocks that took off this year, because investors love companies based on a subscription model and recurring revenues.

It reports Tuesday. Is a standard beat-and-raise story, tending to blow away estimates. 

Spotify recently tested its 50-day moving average, then rebounded. A momentum indicator--MACD--just made a bullish crossover. It has started building a base and is going higher. The Chaikin Money Flow (CMF) remains positive. It just broke a ceiling of resistance on healthy volumes. Lang says this could hit $700.

They lead in audio. The chart shows tremendous momentum. Profits are driven by premium pricing, ad growth and lower podcast costs. They are getting into ad-supported revenues. He targets $892. Buy 3 tranches.

Valuation has kept her out. Early mover, but the space is going to get more competitive.