Goldman Sachs maintained a Buy rating on Spotify in a report published on Oct. 15, 2026, and cut its target price to $645 from $655. Based on Spotify’s current share price of $523.96, that implies 23.1% upside.
The bank said market concern has focused on whether Spotify’s recent price increases could drive subscriber losses. Goldman’s view is that the company’s long-term opportunity now extends beyond standard subscription hikes, with audiobooks, AI remix tools and personalized podcasts opening more room for average revenue per user, or ARPU, to rise over time.
Third-quarter estimates came in slightly below guidance
Goldman expects Spotify to report third-quarter revenue of €4.964 billion, a little below the company’s €5.0 billion guidance and also slightly below market consensus. It projects 305 million paid subscribers and 788 million monthly active users, broadly in line with Spotify’s own targets.
The bank also lowered its 2026 operating outlook. It said the revision reflects weaker ad revenue in the second half of the year and updated foreign-exchange assumptions. Pressure on advertising revenue is expected to continue into the fourth quarter. Goldman said investors are watching whether fourth-quarter revenue and gross profit guidance fully reflect subscription trends and the pace of investment.
By region, U.S. monthly active users were forecast to grow 2% year over year, after a 1% decline in the second quarter. International MAUs were seen rising 6%, matching the second-quarter pace. Pakistan, Japan and Egypt were listed as the fastest-growing markets, with growth rates of 29%, 19% and 14%, respectively.
Goldman described Spotify’s pricing model as entering a third phase
The report breaks Spotify’s monetization path into three stages. In the first, music streaming lagged other digital entertainment categories in monetization. In the second, Spotify shifted toward more frequent subscription price increases. In the third, the company moved beyond basic pricing actions and started building a value-added subscription ecosystem.
Spotify has raised prices several times since 2023. It did so in June 2023 and June 2024, then raised prices again in the U.S. and parts of Europe in January 2026. Goldman said that pace is faster than its earlier expectation of one increase every one to two years. Management, according to the report, has stressed that churn after those increases remained limited, which Goldman said suggests music streaming is still relatively under-monetized as an entertainment product.
Goldman said Spotify’s value-added subscription ecosystem includes audiobooks, personalized podcasts, creator tools, AI remix features and cover-related products. Those additions, in the bank’s view, can push ARPU beyond the base subscription price and toward premium add-ons and usage-based products. It expects long-term Premium ARPU compound annual growth in the mid-single-digit range.
User engagement remains central to the pricing case
Citing Sensor Tower data, Goldman said Spotify’s daily-active-user-to-monthly-active-user ratio was 0.54 in the third quarter, the highest among audio streaming peers. The average over the past three years was about 0.55. Goldman said that level of engagement supports the company’s room to raise prices.
Global sessions rose 1.7% year over year in the third quarter. Average session length for Spotify was about 0.85 minutes, compared with about 2.23 minutes for YouTube Music. Goldman noted that while YouTube Music users spend longer per session, Spotify users open the service more frequently, leaving Spotify ahead on the DAU-to-MAU ratio.
Similarweb data showed stable traffic to Spotify’s U.S. website. New visitors rose 4.6% month over month, while returning visitors fell 1.9%. Returning users accounted for 52% of traffic and new users 48%. Goldman said the level of user stickiness and the returning-user mix support subscription revenue stability.
Long-term ARPU expansion and financial forecasts
Goldman expects Spotify Premium ARPU to grow at a mid-single-digit compound annual rate over the long term, driven mainly by pricing discipline and the expansion of its monetization ecosystem. AI remix subscriptions were identified as one source of incremental contribution, with a launch expected in 2026.
The bank said Spotify is well positioned across several multi-year themes: Premium price increases and tiered pricing architecture, product additions such as audiobooks and live ticketing, MAU conversion and ad ARPU expansion in emerging markets, and operating leverage that can support free cash flow generation.
Goldman forecasts revenue of €19.483 billion in 2026, €22.677 billion in 2027 and €25.802 billion in 2028. EBITDA is projected to increase from €2.941 billion in 2026 to €4.864 billion in 2028. Earnings per share are expected to rise from €13.03 in 2026 to €22.20 in 2028. Free cash flow is seen growing from €3.534 billion in 2026 to €5.178 billion in 2028.
Valuation and risk factors
Goldman cut its target price to $645 from $655 using a blended valuation based on 22.5x EV/EBITDA and 21x EV/free cash flow, excluding stock-based compensation. Even with the lower target, the bank kept its Buy rating on the stock.
The report listed downside risks that include stronger competition affecting subscribers and MAUs, price increases causing more churn than expected, weak ad monetization execution, a reversal in gross-margin momentum, and higher platform investment and sales and marketing costs. Upside risks include faster-than-expected expansion of the value-added subscription ecosystem, improvement in ad revenue, and stronger-than-expected operating leverage.
According to the original article, the piece is a整理与解读 of a third-party brokerage report by Goldman Sachs dated Oct. 15, 2026, combined with public market information. The ratings, target price, earnings forecasts and related views cited in the article reflect the brokerage analysts’ views and do not constitute investment advice.