Like the rest of the market, SPOT stock has been in a downtrend for the last several weeks. The company will be reporting quarterlies in a few days (on February 2, 2022) meaning that the stock has already priced in a slowdown and seems to have limited downside risk from here. Bullish option flow was detected in SPOT stock.
Bullish Option Flow
Make sure to review this lesson on option flow so that you understand the image above.
Spotify price target lowered to $260 from $365 at KeyBanc
On January 27, 2022, KeyBanc analyst Justin Patterson lowered the firm’s price target on Spotify to $260 from $365 and keeps an Overweight rating on the shares. The analyst expects Spotify’s Q4 results to continue the theme amid internet prints of more moving parts across user growth and some uncertainty on the pace of margin expansion. While he lowered his 2022/2023 Premium Subs and RevenueThe income statement provides a summary of a company's revenue and expenses over a specified period of time, typically a year or a quarter. It shows the company's total revenue, th... forecasts below consensus, the analyst “finds some comfort” that Ad-Supported revenue remains a large opportunity and valuation is not demanding.
Spotify removes Neil Young’s music after Joe Rogan ultimatum, WSJ says
On January 26, 2022, Spotify pulled Neil Young’s music from its platform after the rock star penned an open letter asking the company to remove his music from the service, arguing it is spreading fake information about COVID-19 vaccines through Joe Rogan’s podcast, the Wall Street Journal’s Anne Steele reports. “We want all the world’s music and audio content to be available to Spotify users. With that comes great responsibility in balancing both safety for listeners and freedom for creators,” a Spotify spokesman said. The spokesman also said the company has detailed content policies in place and has pulled over 20,000 COVID-related podcast episodes since the beginning of the pandemic, the author says. Source: https://www.wsj.com/articles/neil-youngs-music-is-being-taken-down-by-spotify-after-ultimatum-over-joe-rogan-11643230104?st=oxhw0jds7vlsw8o&reflink=desktopwebshare_twitter
Spotify price target lowered to $240 from $380 at Monness Crespi
On January 26, 2022, Monness Crespi analyst Brian White lowered the firm’s price target on Spotify to $240 from $380 and keeps a Buy rating on the shares ahead of the company’s Q4 results on February 2. Spotify is “riding a favorable secular trend” and tapping into a large digital ad market, but it also faces an “unforgiving tech tape and Netflix’s challenges have ushered in fears of the unknown,” White tells investors in a research note. The analyst believes the combination of a “tech tantrum” and Netflix’s “troubling” Q1 paid global streaming net addition guidance issued last week “has cast a cloud of suspicion over the Spotify story.”
Spotify announces launch of call-to-action cards for podcast ads
On January 6, 2022, in a post to its corporate blog, Spotify stated: “Over the last year, Spotify has introduced new tools for creators to interact more directly with their audiences through video podcasts, Q&As, and Polls. We’ve also enabled experiences like Blend, which allows listeners to merge their musical tastes with their friends’ in one shared playlist. Finally, we introduced our voice-controlled in-app experience, “Hey Spotify.” Now we’re bringing interactivity to the audio ad experience… excited to announce a new ad experience launching across podcasts called call-to-action – CTA – cards… With the launch of this new ad experience, we’re making podcast ads interactive for the first time, transforming the format from something that can only be heard, into an experience that you can also see – and, most importantly, click… CTA cards are the latest step in Spotify’s vision for the future of audio as an interactive, multi-way experience.” Source: https://newsroom.spotify.com/2022-01-06/spotify-introduces-call-to-action-cards-for-podcast-ads/
📺 Spotify Loses Billions Over Joe Rogan Controversy[embedyt] https://www.youtube.com/watch?v=pxJY-DUXb8o[/embedyt]
📉 SPOT Stock Technical Analysis
The short-term trend is negative, as is the long-term trend. SPOT is part of the Entertainment industry. There are 84 other stocks in this industry, SPOT did better than 46% of them. SPOT is currently making a new 52 week low. This is a very bad signal. SPOT is lagging the S&P500 Index which is trading in the middle of its 52-week range. Prices have been falling strongly lately, it is better to avoid new long positions here. Volume is considerably higher in the last couple of days. In combination with the strong move down this is a bad signal.
There is a resistance zone ranging from 220.39 to 223.69. This zone is formed by a combination of multiple trend lines and important moving averages in multiple time frames. There is resistance at 243.17 from a horizontal line in the daily time frame. There is also resistance at 262.25 from a trend line in the weekly time frame. Finally, there is resistance at 292.02 from a horizontal line in the weekly time frame.
The technical rating of SPOT is bad and it also does not present a quality setup at the moment. SPOT stock has a Setup Rating of 3 out of 10. Price movement has been a little bit too volatile to find a nice entry and exit point. It is probably a good idea to wait for a consolidation first. Click here to sign up for email alerts on when SPOT stock consolidates and has a Setup Rating of 8 or higher.