Spotify heads to the Street for third quarter earnings after stock slump

Music streaming service Spotify is expected to report a slight rise in revenues when it publishes its third quarterly earnings on Thursday, after having dropped below its initial listing price amid a wider stock slump in the sector.

Consensus estimates collated by S&P Global Market Intelligence have anticipated revenue of €1.34bn (£1.2bn) for the three months to September, coming in at the middle of Spotify's own predicted range of €1.2bn to €1.4bn.

The Swedish tech firm posted quarterly revenues of €1.27bn in June, edging just above analyst expectations.

Additionally, Spotify's losses are expected to narrow to €55m from a loss of €90m in June.

While last quarter's results took Spotify's share price to a record high, and just days later to a peak in market value in excess of $35bn (£27bn), the firm's stock has since slipped around 25 per cent to the tune of $9bn. At last week's close, Spotify's market value was $26.3bn, below its debut value of $26.5bn.

However this has not shaken all investor confidence, with Morgan Stanley maintaining its "overweight" rating in a research note on the stock last week as the global market for streaming services continues to grow.

Analyst Benjamin Swinburne pointed out that Spotify still has yet to expand into several untapped markets, such as Mexico, India and Brazil, with significant growth ahead. 

Spotify has predicted total monthly active user growth to between 188m and 193m users for the third quarter, compared to ending its second quarter with a total of 180m users.