$SPOT closed yesterday at $149 with a valuation of $27bn. Wall Street's target price is $238 a share, so they say Buy.
But let's do a little comparison with Vivendi who own Universal Music, the largest music publisher with 29% market share or Sony with 22% market share
| Metric | Spotify | Vivendi | Sony |
|---|---|---|---|
| Value $ inc. cash | 27bn | 36bn | 51bn |
| Forecast sales $ | $7bn | $17bn | $82bn |
| % music | 100% | 54% | 9% |
| Value / Sales | 4.2x | 2.1x | 0.6x |
We don't have a way to value the entire music industry, but say 50% of Vivendi and 10% of Sony equals 50% of the industry, that implies $46bn.
So if Spotify hits the $238 price target its $43bn would be in striking distance of the whole music publishing industry.
Entirely possible? Yes.
But as the vampire squid might say: looks like $SPOT needs to grow into its valuation.
Submitted April 04, 2018 at 06:12AM by shane_stockflare https://ift.tt/2uIhXvO
