JPMorgan analyst Doug Anmuth reiterated an Overweight rating on Spotify Technology ( SPOT ) and raised the price target to $670 from $640 on Tuesday. Shares were trading higher on Wednesday.

As the largest pure-play audio streaming platform, Spotify ( SPOT ) continues to benefit from the broader shift from transaction-based to access-based models. The company is growing monthly active users (MAUs) at roughly 10% and is generating positive free cash flow.

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Anmuth sees Spotify's ( SPOT ) post-earnings pullback as a buying opportunity, citing solid mid-teens growth and continued progress toward its medium-term margin goals. The stock declined on lighter Q2 MAUs, margin variability, and tempered expectations for the superfan tier. Still, Spotify ( SPOT ) remains confident in strong second-half MAU growth, supported by product improvements, efficient marketing, and its year-end Wrapped campaign.

Anmuth also expects Spotify ( SPOT ) to keep investing in its core Music offering while expanding across Audiobooks, Video, and Podcasts. He projects:

2025 net adds of 67 million MAUs (down from 73 million in 2024)

24 million Premium Subscribers (vs. 27 million in 2024).

15% FX-neutral revenue growth, including 9% growth in Premium Subscribers

A 4% FX-neutral ARPU increase.

Gross margins expanding to 31.8% (+160bps Y/Y)

Operating margins to 12.7% (+400bps Y/Y)

Free cash flow reaching €2.9 billion (+26% Y/Y).

Margin gains will be front-loaded, with sequential compression in Q2 and Q3 due to continued growth investments, Anuth says.

Overall, he models average 2025–2026 FX-neutral revenue growth of 13%, gross profit growth of 17%, operating income growth of 44%, and free cash flow growth of 20%—metrics he says justify Spotify's ( SPOT ) premium valuation.

Price Action: Spotify ( SPOT ) stock traded higher by 6.42% at $613.98 at the last check on Wednesday.

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