Spotify (SPOT) Outpaces Stock Market Gains: What You Should Know

Spotify (SPOT) closed at $278.24 in the latest trading session, marking a +1.26% move from the prior day. This move outpaced the S&P 500's daily gain of 1.05%. Meanwhile, the Dow gained 1.44%, and the Nasdaq, a tech-heavy index, added 0.66%.

Heading into today, shares of the music-streaming service operator had gained 53.79% over the past month, outpacing the Business Services sector's loss of 1.55% and the S&P 500's loss of 1.56% in that time.

SPOT will be looking to display strength as it nears its next earnings release, which is expected to be July 29, 2020. In that report, analysts expect SPOT to post earnings of -$0.49 per share. This would mark a year-over-year decline of 4.26%. Our most recent consensus estimate is calling for quarterly revenue of $2.12 billion, up 12.92% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of -$1.69 per share and revenue of $8.79 billion, which would represent changes of -46.96% and +15.49%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for SPOT. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. SPOT is currently sporting a Zacks Rank of #2 (Buy).

The Technology Services industry is part of the Business Services sector. This industry currently has a Zacks Industry Rank of 158, which puts it in the bottom 38% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow SPOT in the coming trading sessions, be sure to utilize Zacks.com.

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