Early Bird Prime for July 14, 2024

Spotify Technology (NYSE: SPOT) is having a rockstar year in 2024.

After a rough couple of years between 2021 and 2022, where the stock took a nosedive, Spotify has made a triumphant comeback. The stock is up 60.10% this year, making it the financial equivalent of a chart-topping hit.

So, what's behind this meteoric rise? Well, Spotify has been on a mission to turn its financials around, and it seems to be working. The company has been cutting costs, pushing for profitability, and enjoying both revenue and user growth. It's like they finally found the right mix of beats to keep the party going.

With all this good news, you might be thinking about buying Spotify’s stock or holding on to it if you’ve already invested. Well, hold your horses, or in this case, your headphones. 

Just this past week, Redburn Atlantic published a note that Wall Street is "simply forecasting too much growth" for Spotify. They even went so far as to lower their price target for the stock by 25%. Ouch.

Redburn Atlantic's concerns aren't just noise. They pointed out increasing competition in the music streaming space and some structural challenges that could make Spotify's price increases hit a sour note. These are valid concerns, and it's hard to imagine the stock continuing to grow at its current breakneck pace.

Given these challenges, should you invest in Spotify now? It's a question that requires more than just a quick listen to the latest earnings call. Here’s the answer…