so, there is this thing called spotify, where people listen to music. An analyst, named Justin Patterson, thinks that it will keep growing and making more money because of its good pricing power. This means that people will keep wanting to use spotify and pay for it. Patterson expects there might be fewer people joining in the near term because of price changes, but thinks that from 2025 to 2026, spotify will make a lot more money. Also, he thinks that spotify's profit margins will get better because they are increasing their prices. So, he is optimistic about the future of spotify. Read from source...

1. In the article "Spotify's Long-term Growth and Pricing Power Set to Boost Revenue: Analyst", the author Anusuya Lahiri provides an update on the recent rating change by KeyBanc's Justin Patterson, who raised Spotify's price target to $410. While the update seems reasonable, the way it has been narrated creates confusion.

2. The article states that due to recent pricing changes, the analyst expects lower near-term net adds but expects higher 2025-2026 revenue growth and margins. However, this statement contradicts the following statement where the author mentions that the consensus appears too conservative on 2025-2026 revenue growth, gross margin, and operating margin.

3. The article also highlights the inconsistency in the analyst's forecast. The author states that while the analyst's 2024 operating profit forecast declines by ~4% due to higher social charges, his 2025 and 2026 operating profit forecasts increase by 2% and greater than 1%, respectively. This seems illogical as the operating profit should typically decline in the future if the social charges remain high.

4. Additionally, the article quotes the analyst's skepticism about Spotify's guidance for Visible Alpha consensus for 20 million MAU net adds and 6 million Premium Subscriber net adds. However, the analyst does not provide a valid reason for his skepticism.

5. Lastly, the article concludes with a statement that the degree of upside will be dictated by whether Spotify chooses to reinvest in marketing and whether there are any legal costs related to industry disputes. This statement is vague and lacks specific information.

Overall, the article suffers from inconsistent analysis, irrational arguments, and emotional behavior, which detracts from its credibility.

bullish. AI.

1. Spotify Technology SA (SPOT) is rated 'Overweight' by KeyBanc's Justin Patterson with a new price target of $410. The rating is based on favorable long-term growth and pricing power.

Risks:
- Near-term net add guidance may weigh on the stock due to pricing changes.
- The consensus may be too aggressive on third-quarter Premium Subscriber net adds due to recent pricing changes.

Recommendation:
- Despite near-term headwinds, KeyBanc rates Spotify 'Overweight' due to favorable long-term growth and pricing power.

2. Patterson raised his model and expects higher 2025-2026 revenue growth and margins for Spotify.

Risks:
- The consensus appears too conservative on 2025-2026 revenue growth, gross margin, and operating margin.

Recommendation:
- The risks appear to be skewed to the upside with favorable revenue growth and margins in the long-term, according to KeyBanc's analysis.

3. Patterson expects lower near-term net adds due to pricing changes but notes this misses the bigger picture.

Risks:
- There may be headwinds in the near-term due to pricing changes.

Recommendation:
- Despite near-term headwinds, the bigger picture looks favorable due to long-term growth and pricing power, according to KeyBanc.

4. KeyBanc's Justin Patterson expects second-quarter MAUs to be in line at 631 million.

Risks:
- There may be risks around second-quarter MAUs being in line as per expectations.

Recommendation:
- KeyBanc's analysis suggests Spotify's MAUs could be in line, implying the risks may not be significant in this case.

5. Patterson expects third-quarter revenue to be at 3.95 billion euros, lower than consensus forecasts.

Risks:
- There may be risks around third-quarter revenue coming in lower than consensus forecasts.

Recommendation:
- The lower forecast vs consensus is due to more modest Ad-Supported revenue, according to KeyBanc, indicating that the risks may be manageable.

6. The analyst also projects softer MAU and Premium Subscriber net adds due to price increases.

Risks:
- There may be risks around softer MAU and Premium Subscriber net adds due to price increases.

Recommendation:
- KeyBanc's analysis suggests that risks could be manageable due to favorable long-term growth and pricing power.

Overall, based on KeyBanc's analysis, the risks appear to be manageable and the long-term growth and pricing power suggest an 'Overweight' rating for Spotify Technology SA.