Pivotal Research Group analyst Jeffrey Wlodarczak downgraded his rating on Spotify Technology SA shares to "hold" from "buy," citing the company's premium-subscriber miss for a second consecutive quarter.
In a research note, Wlodarczak said despite favorable year-over-year premium churn trends and monthly active user growth, the premium subscriber growth is "all that matters." The analyst reduced Spotify's premium subscriber outlook at 257 million premium subscribers by 2025, down from 264 million previously.
The analyst lowered the price target on the company's stock to $150 from $155.
Spotify on July 31 reported 108 million premium subscribers globally as of the end of the June quarter, up 31% year over year. The premium user figure fell on the low end of the company's guidance range of 107 million to 110 million and below Spotify's goal for growth on the high end of its given range.
Spotify reported a 29% year-over-year increase in total monthly active users, to end the quarter with 232 million. That compared to guidance for monthly active users of 222 million to 228 million.