Spotify stock has another 25% upside: Wolfe Research

Spotify Technology S.A. (NYSE: SPOT) has already nearly doubled since the start of the year but a Wolfe Research analyst sees further upside ahead.

Spotify stock has upside to $190

On Wednesday, Zach Morrissey said shares of the music streaming platform could climb all the way up to $190 – a close to 25% upside from here.

His “outperform” rating on Spotify stock arrives shortly after the company said it ended its first financial quarter with 515 million monthly active users – a 22% year-on-year increase. The analyst said in his research note today:

He’s convinced that SPOT will remain resilient than peers in the face of macroeconomic weakness.

Price hikes will benefit Spotify stock

Spotify has already raised prices in the international markets and one is expected to follow in the United States this year.

Higher prices, as per the Wolfe Research analyst, will help the media services company in terms of revenue growth and margin expansion.

Spotify stock will also benefit now that the advertising market is recovering, Morrissey added. Subscriptions and minutes per active user data also suggest that the music streaming platform is still far away from market saturation, he concluded.