Spotify Technology (SPOT 1.23%) stock has closed in the triple digits at the end of 50 of its first 52 months as a public company. Barring a Halloween miracle, this month will be the third time that shares of the global streaming music leader break below $100. 

These are tricky times for the platform. Competition is intense. Ad-supported companies are stumbling, and a wobbly economy doesn't bode well for Spotify's more lucrative premium service. The stock took a 13% hit on Wednesday following disappointing quarterly results that confirmed the headwinds that the industry is facing. 

What if Spotify isn't just fading out slowly like so many musical tracks over the years? What if the catalysts are there to boost margins, catapult the platform into sustainable profitability, and essentially turn this beat around? Let's see why Spotify may not be trading in the double digits for long. 

Two people in a car.

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Pump up the volume

Spotify hit the market in early 2018 at a reference price of $132. It's technically a broken initial public offering (IPO) at this point despite reaching record audiences. There were 456 million monthly active users at the end of the third quarter, a 20% increase over the past year. The 23 million net additions it experienced over the last three months is a new third-quarter record for Spotify.

There are two ways to consume the streaming audio platform. You can pay a monthly subscription for ad-free music listening, and 40% of those 456 million accounts are doing exactly that. You can also stream the service for free, putting up with audio ads along the way. The rub with the latter is that ad revenue is just 13% of Spotify's revenue despite being the only way it monetizes 60% of its audience. With the ad market taking a cue from the economy's recessionary tremors, marketers aren't going to be ramping up their advertising budgets anytime soon. 

It gets worse. Ad-supported users are growing faster, up 24% over the past year compared to a 13% increase in paying listeners. If the global economy keeps sliding you can expect more premium accounts to shift over to the less profitable ad-supported audience base.

Investors don't like the trend, but there's more at play here. Premium streaming prices are on the rise. Over the past few days alone, rivals Apple and Alphabet's YouTube announced increases for their streaming music services. Spotify in the U.S. has held firm -- at $9.99 a month for the basic plan for more than a decade -- but it now has the flexibility to follow its smaller rivals higher. 

Spotify isn't dead, even though its stock is hitting all-time lows this month. It may not be profitable on a reported basis, but it has rattled off 10 consecutive quarters of positive free cash flow. Its decision to beef up its podcasts in recent years -- despite courting controversy for some of the platform's more extreme personalities -- will pay off over time. There are now millions of podcasts available on Spotify, including some that are exclusive to the platform. The boost in spoken word content that is now extending to audiobooks will help set Spotify apart from its rivals when it comes to exclusive programming. Podcasts are also an easier sell to advertisers given the defined and captive audiences.

This is still a leader among music stocks. It has a strong dynamic founder CEO, a beloved product, and a cash-rich balance sheet that should weather the upcoming storm. Fade-outs can also fade back in, and Spotify might not be trading below $100 for long for patient investors if it's able to get back on track.