Spotify Technology SA (SPOT  ), will be reporting its fourth-quarter earnings on Feb. 6. Wall Street expects a negative 14 cents in EPS and $4.06 billion in revenues as the company reports before market hours.

Here's what analysts will be focusing on, and how the stock currently maps against Wall Street estimates.

Spotify Investment Thesis: The music streamer offers a compelling investment opportunity driven by sustained growth in monthly active users (MAUs) amidst strong industry trends. The stock is up 81.50% over the past year. Spotify maintains a robust financial position with positive free cash flow and ample reserves.

With a global presence covering 184 countries and territories and boasting 226 million paid subscribers as of Sept. 30, 2023, Spotify exhibits solid growth across all user categories, driving an 11% YoY revenue increase in Q3.

Spotify has an optimistic Q4 outlook. It anticipates the addition of 27 million new MAUs, including 9 million paid subscribers, underscores its continued appeal. Strategic investments in research and development (R&D), exceeding 10% of revenue, introduce innovative features like AI-powered voice translations and expansion into audiobooks, enhancing user value.

Despite the short-term effects of the headcount cut, Spotify's commitment to service development, coupled with its strong financial standing, positions it for long-term growth. With the current valuation trading below historical highs, investors may find an attractive entry point, considering the positive trajectory in user growth and innovative service offerings.

Spotify Analysts' Focus & Consensus Ratings

Q4 Analysts' Focus: Analysts will be focusing on the impact of the recent restructuring initiatives on Spotify's business and management commentary and outlook regarding the same. The restructuring, including a significant headcount cut, aims to boost profitability and create shareholder value. Analysts expect the full impact to take a few quarters to unfold.

Ratings & Consensus Estimates: Consensus analyst ratings on Spotify stock stand at a Buy currently with a price target of $187.54. However, analysts who rated the stock in January have either maintained or upgraded their rating on Spotify with their target prices ranging from $195 to $280 a share.

Price Action: Spotify stock closed the trading day at $222.47 on Feb. 2.