The stock is falling as investor concern lingers over the company's soft Q2 forecast, which overshadowed a strong Q1 earnings report from late April. [4, 5]
- Analysts are reassessing their outlooks; UBS lowered its price target to $735 from $760, and Morgan Stanley cut its target to $590 from $630, citing investment costs and lower free cash flow projections. [1]
- Despite record Q1 gross margins and free cash flow, Wall Street is focused on guidance for Q2 operating income that fell short of expectations, as well as projections that premium subscriber additions may not cross the 300 million threshold as quickly as hoped. [5, 16]
- The pressure comes amid other company news, including Universal Music Group selling a portion of its stake in the company and Spotify announcing a new partnership with the Austin City Limits Music Festival. [6, 7, 18]