Spotify's stock fell 30% but strong growth and cash flow suggest it's undervalued and a buy.

Spotify's stock price has dropped 30% from its all-time high, but this decline does not reflect the company's solid business fundamentals. The company shows strong growth in monthly active users and premium subscribers, supported by geographic diversification and effective monetization strategies. Spotify's gross margin improved to 33%, operating leverage increased, and free cash flow turned positive at €3.2 billion over the last twelve months despite higher capital expenditures. The author expects double-digit total returns, making Spotify a strong buy based on these financial indicators.