Spotify stock (NYSE:SPOT) is gaining attention again after Oppenheimer analysts issued an “Outperform” rating and a bold new price target of $800. That would imply significant upside from current levels—roughly 86% over the next few years. But what’s behind this bullish Spotify stock forecast, and is the optimism justified?
Why Analysts Are Bullish on Spotify Stock
Oppenheimer believes Spotify has “the longest runway” in the large-cap tech space. Despite impressive growth so far, the company has only tapped a fraction of its potential. Forecasts suggest Spotify could add 75 million net users annually from 2026 to 2030. Even then, the platform would reach just 17% of the global adult population—far below peers like Meta (NASDAQ:META) and YouTube (owned by Alphabet, NASDAQ:GOOGL).
In other words, there’s room to grow—and monetization opportunities are just beginning.
Monetizing the Free Tier: A €10–12 Billion Opportunity
A key part of the bullish Spotify stock forecast is monetization of the company’s free tier. Analysts estimate that Spotify could generate up to €10 billion in annual ad revenue by 2030 if it closes the gap with traditional radio and podcast ad rates. Another option on the table: introducing a €1 monthly fee for the lowest tier, which could bring in €12 billion in revenue.
Recent App Store policy changes are also expected to improve iOS user conversion to paid plans. Meanwhile, a new “Superfan” tier and steady price increases—without major user churn—are likely to boost margins further.
Spotify’s Margins and Buyback Plan Strengthen the Case
Spotify’s gross margin currently sits around 31%, but analysts forecast an expansion to 37% by 2030. That increase would come from cost efficiencies, better ad targeting, and growing profits from the podcast segment.
Adding to the bullish case, Spotify has committed to a €20 billion share buyback program while still maintaining €17 billion in cash reserves. That level of capital discipline supports the argument for long-term shareholder value creation.
Recent Earnings Underscore Momentum
Spotify ended its most recent quarter with 678 million monthly active users (MAUs) and 268 million premium subscribers—its second-best Q1 ever for premium additions. Total revenue rose 15% year-over-year to €4.2 billion, while free cash flow hit €534 million.
Premium revenue grew 16% thanks to higher subscriber counts and price hikes. Advertising revenue rose 5%, aided by Spotify’s automation features and growing interest from smaller advertisers. Gross margins improved to 31.6%, beating company guidance.
Looking ahead, Spotify expects to hit 689 million MAUs and 273 million subscribers in Q2, with €4.3 billion in revenue.
Spotify Stock Forecast: Is It Still Undervalued?
From a valuation perspective, Spotify appears compelling. Analysts project revenue to nearly double from $16.28 billion in 2024 to $33 billion by 2029. Adjusted earnings per share are expected to grow from $5.71 to $21.23 over the same period. Free cash flow is also forecast to surge from $2.37 billion to $7.58 billion.
If Spotify trades at 35 times forward FCF, it would reach a market cap of $265 billion—86% higher than today’s valuation.
Of the 32 analysts covering SPOT stock, 20 rate it a “Strong Buy.” The average price target is $741, with some calling for even higher levels.
Bottom Line: Spotify Still Has Room to Climb
While no investment is without risk, the Spotify stock forecast points to strong upside based on expanding margins, monetization potential, and global user growth. With a supportive valuation and bullish analyst consensus, SPOT stock may be worth a closer look for long-term tech investors.
Featured Image: Freepik
