By Angela Palumbo

Spotify Technology stock continues to outperform the market amid a broader tech sell-off. Wall Street largely remains confident in the music streaming company's future, despite economic uncertainty.

Shares of Spotify have risen 22% this year and 103% over the last 12 months. That's a stark difference from the 4.6% decline of the S&P 500 this year and the 7.8% increase of the index in the last 12 months.

Investors like that Spotify continues to grow. The company reported fourth-quarter earnings of EUR1.76 (about $1.90) a share in February, after posting a loss of 36 euro cents a share in the same period the prior year. Spotify also said it added more subscribers than expected in the last three months of 2024.

The strong performance came even after the company raised prices for premium subscribers last June. This bodes well for Spotify as the economic environment remains rocky. It looks like people will keep their music streaming subscriptions, even as prices edge higher.

"It is our view that SPOT's subscription model should be more defensive/utility-like amid the current macro uncertainty," BofA Securities analyst Jessica Reif Ehrlich wrote Tuesday. She rates the stock as a Buy with a $700 price target.

That doesn't mean Spotify is immune to market jitters. The stock fell 9.5% in March -- its worst month since September 2022 when it fell 20%, according to Dow Jones Market Data.

"Recent volatility could have an impact on future advertising growth, especially since our forecasts contemplate a 2H [second half of 2025] acceleration," Ehrlich wrote. "Current uncertainty could put downward pressure on ad budgets."

Still, many analysts are optimistic about the stock's long-term potential. Of the 43 surveyed by FactSet, 27 say the stock is a Buy, 14 say it's a Hold and two say Sell.

"With access to over 100M tracks, 6.5M podcasts, and 350K audiobooks and a superior recommendation algorithm that greatly enhances discovery, we think Spotify's subscription value proposition greatly outweighs its cost even after recent price increases," Canaccord Genuity analyst Maria Ripps wrote Tuesday. "We also see room for future price increases."

She rates the stock as a Buy with a $700 price target.

Shares of Spotify were down 0.7% to $546.37 on Tuesday.

Write to Angela Palumbo at angela.palumbo@dowjones.com

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April 01, 2025 14:04 ET (18:04 GMT)

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