SPOT
Spotify
Platform / Network
★ Quality 42/100Price today
$485.71
what the market pays
Worth
$366.06
calculated cycle value
Price is 33% above its value
charlieapp.co
Price vs Intrinsic Value
The line is the price month by month; the green band marks when it's undervalued (−20% off value). When the price drops in there, the discount is real, not opinion.
Where does the value come from?
Digital platform
$341.08
per share
How it's calculated
C7b: royalty floor ~70% revenue compresses GM 31%. FCFeco $14.58 × 25x + $12 = $394. Q4 EPS $5.20 (beat +62%). Audio platform monopoly. Audiobooks+podcasts = margin expansion. BARGAIN <$315, ATTRACTIVE <$374.
Net cash in the bank
cash minus financial debt, per share
Total calculated value
business + cash
How many times the cash flow
Platform / Network · vs 27 peers
You pay 33.8x times this business's cash flow; its sector median is 26.1x.
26% above what Charlie thinks it's worth (25x) — you're overpaying, sector or no sector.
Why Overvalued?
Its free cash flow is $13.64/share × 25.0x multiplier plus $24.98 in net cash = $366.06 in intrinsic value. Today's price of $485.71 is 25% above the calculated value — the market is paying a premium over what the model sees as fair.
The price is 33% above the calculated value. You're paying more than it's worth.
Buying here lowers your expected return and wipes out the safety margin.
The next reasonable entry zone starts at $347.76.
At what price would buying make sense?
Entry zones
🟢 Undervalued
≤$292.85
-20% off Value
🟡 Discounted
≤$347.76
-5% off Value
🔴 Today
$485.71
-25% Valor
Overvalued
The market prices it too high versus what the business makes. Patience pays off here.
“Time is the friend of the wonderful company, the enemy of the mediocre.”
— Warren Buffett
Model updated · July 2026
The business
The planet's jukebox, billed month by month straight from your pocket.
Spotify streams music and podcasts to over 675 million users; charges a monthly subscription to paying ones and sells ads to the free ones. Booked $17.2B in 2025. Now adding audiobooks to sell something that doesn't hand almost all the money to the record labels.
Its playlists and personalized algorithm create switching laziness: your library lives there. But it's not a deep moat: it doesn't own the content, it rents it. Record labels take about 70% of every dollar, and that squeezes the margin to 32%.
Revenue history
From $11.4B to $17.2B in 4 years. The business grows steadily.
Where each $100 of sales goes
Revenue $17.2B · FY2025
Of every $100 in sales, $87 goes to costs and operations; $13 is left as net profit (13% margin).
Catalysts and risks
Audiobooks and podcasts: owned content that expands margin without paying the 70% royalties.
Price hikes in 2025 with low subscriber churn.
Q4 earnings per share beat expectations by 62%.
Record labels set the royalty floor (~70% of revenue): they hold the leash.
Apple Music, Amazon Music and YouTube Music fight for the same ear with deeper pockets.
32% gross margin: high-volume, low-fat business.
Charlie's note
“Paying 25x for a business that hands 70% to the labels demands faith that audiobooks widen the margin. The 18% growth is real; the moat is borrowed. Quality isn't bad, but the price already prices in a good chunk of the optimism.”
Analysis · July 2026
So when would be a good price for Spotify?
By our calculation, not yet. We will email you the day it drops to $347.76 — so you do not have to keep checking.
🔔 Email meFree · no card
Charlie informs, it doesn't advise. No information should be taken as a recommendation to buy or sell.