The music streaming giant's operating income missed estimates
Spotify Technology SA (NYSE:SPOT) stock is 4.8% lower at $568.90 before the bell, after the streaming giant reported first-quarter operating income of 509 million euros, missing analyst estimates of 519.9 million euros, per FactSet. Revenue for the quarter came in at 4.2 billion euros, matching expectations, while monthly active users (MAUs) grew to 678 million -- in line with the company’s prior guidance. The streaming giant also issued a disappointing operating income forecast for the current quarter.
Spotify stock is up 106.4% year over year and 33.6% year to date. The equity is looking to extend yesterday’s 3.7% dip, which snapped a four-day winning streak. That rally lost steam around the $625 level -- an area that also capped a late March breakout attempt toward SPOT’s Feb. 13 all-time high of $652.18 -- and its 80-day moving average now looks like the most likely candidate to contain this pullback.
A sentiment shift among options traders, who were more bullish than usual heading into earnings, could create additional pressure. Over at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and Nasdaq OMX PHLX (PHLX), SPOT sports a 10-day call/put volume ratio of 1.58, which ranks higher than 97% of all readings from the past year.
The lackluster results may also prompt analysts to reassess their upbeat outlooks. Coming into today, 21 of 30 covering brokerages rated Spotify stock a "buy" or better, while the average 12-month target price of $637.52 was a 6.6% premium to its latest close.