Spotify (NYSE: SPOT) will report earnings results for the second quarter of 2019 on Wednesday before the market opens. While continued growth is expected, analysts disagree on how far away the streamer remains from profitability.
Hypebot will cover the call live.
A poll of top analysts show a general consensus that the company to report a loss of $0.35 per share on revenue of $1.84 billion for the second quarter. That's an improvement compared to the previous year quarter when Spotify posted a loss of $2.52 per share on revenue of $1.46 billion.
Two top Wall Street analysts offer very different views of Spotify's future.
Macquarie Research analyst Giasone Salati this week wrote that Spotify is “uniquely positioned to become the global dominant player” and the only streaming music service with "the right business model" to maximize revenue.
But Evercore ISI analyst Kevin Rippey downgraded the stock this week and wrote that "we simply do not see a path by which Spotify can generate the level of gross profit demanded by Street estimates over the medium-term. Consumers enjoy streaming music, and there's little content differentiation between platforms. Therefore, labels' willingness to cede economics to Spotify in a manner that would satisfy estimates is very limited in our view."
Current re-negotiations with rightsholders and overseas expansion could determine which analysts is correct in the long run.
We'll learn more about the current state of Spotify's finances next Wednesday with its latest earnings report.