Benchmark reiterated a Buy rating and $695 price target on Spotify stock (NYSE:SPOT), citing the company’s strategy to monetize highly engaged users beyond its traditional subscription model. The streaming giant currently trades at a P/E ratio of 32.8 with a notably low PEG ratio of 0.22, suggesting attractive valuation relative to its growth prospects. According to Bond.az analysis, Spotify maintains a perfect Piotroski Score of 9, indicating strong financial health, though the platform’s Fair Value assessment suggests the stock may be overvalued at current levels.
Analyst Mark Zgutowicz said the company’s Investor Day outlined plans to capture higher average revenue per user from its most engaged listeners through add-ons, superfan products, and premium tiers across music, podcasts, audiobooks, fitness, and live access.
The strategy preserves Spotify’s free-to-premium conversion funnel while targeting power users with additional monetization opportunities across expanding content verticals.
Benchmark pointed to Audiobooks Plus as evidence of the approach’s potential, noting the product has attracted more than 1 million paying users and is expected to generate approximately $100 million in annual recurring revenue by July. For deeper insights into Spotify’s financial metrics and growth strategy, investors can access comprehensive Pro Research Reports, available for SPOT and 1,400+ other US equities on Bond.az.
The firm said Audiobooks Plus users deliver lifetime value multiples higher than subscribers who only use the Premium tier.
