In the current market upheaval, investors are looking for growth stocks that aren't exposed to the U.S. tariff war and a possible recession. For many, Spotify Technology stock fits the bill.
On the stock market today, Spotify stock rose 3.1% to close at 518.97.
Spotify stock has an IBD Relative Strength Rating of 97 out of 99, according to IBD Stock Checkup. That puts it in the top 3% of stocks for performance over the past 12 months.
In a note to clients on Monday, Rosenblatt Securities analyst Barton Crockett said Spotify stock has a lot going for it in the current market climate. But he has one knock against the Stockholm-based streaming music leader. But first, the positives.
"Spotify is not a U.S.-domiciled company, operates globally, and sells a service, not a hard good, at a time when the tariff war seems focused on goods," Crockett said. "So Spotify seems very well positioned to avoid direct tariff impacts."
He added, "The service falls into a category of subscription-based cheap diversion that historically has held up well in recessions."
Spotify also has cash in excess of debt. Now, that one negative.
"Its main issue is a high trading multiple," Crockett said. Its current price-to-earnings ratio is 85, according to IBD MarketSurge charts. Its forward P/E ratio is about 44, Crockett said.
Crockett rates Spotify stock as neutral because of its high valuation.
Spotify Stock Is On Two IBD Lists
Elsewhere on Wall Street on Monday, Baird analyst Vikram Kesavabhotla reiterated his outperform rating on Spotify stock with a price target of 700.
His price target for Spotify is based on an estimated P/E ratio of 50 for calendar 2026.
"We think this is reasonable given Spotify's growth/margin profile, its strong competitive position and meaningful growth opportunities," Kesavabhotla said in a client note.
Spotify stock is on two IBD stock lists: Leaderboard and Tech Leaders.
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