Is Spotify Technology SA overvalued or undervalued?

As of 29 July 2025, the valuation grade for Spotify Technology SA has moved from expensive to very expensive. The company appears to be overvalued based on its high P/E ratio of 92, a Price to Book Value of 21.52, and an EV to EBITDA ratio of 70.80. In comparison, peers such as Alphabet, Inc. and Meta Platforms, Inc. have more favorable valuations with P/E ratios of 27.18 and 26.39, respectively.
Despite its impressive stock performance, with a 1Y return of 113.43% compared to the S&P 500's 17.14%, the high valuation ratios suggest that Spotify may not sustain this growth in the long term. The significant disparity in valuation metrics highlights the risk of overvaluation, reinforcing the conclusion that Spotify Technology SA is currently overvalued.