Spotify Technology stock rose Monday after the streaming music leader announced plans to raise the price of its premium subscription service in multiple markets outside the U.S.
In a news release, Spotify said it is raising its prices across Europe, the Middle East, Africa, Latin America, South Asia and the Asia-Pacific region.
In Europe, the individual subscription price will rise to 11.99 euros ($13.89) per month from 10.99 euros.
The move was widely expected as the Swedish company looks to improve its profit margins. Analysts say Spotify has pricing power and should be able to increase subscription rates with minimal churn.
On the stock market today, Spotify stock rose 5% to close at 658.59.
Last week, Spotify stock tumbled after the company posted a surprise loss on weaker-than-expected sales in the second quarter. It also came up short with its revenue outlook for the current quarter.
Spotify ended the June quarter with 276 million subscribers worldwide.
"Ten years of pent-up pricing power and minimal churn on past price hikes continue to give us confidence in our ARPU (average revenue per user) trajectory beyond Q3," Bernstein analyst Ian Moore said in a client note. He rates Spotify stock as outperform with a price target of 840.
Follow Patrick Seitz on X at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
