FuboTV (FUBO) is a sports-oriented live streaming company, allowing subscribers to stream hundreds of live sporting events, related news channels, and shows from an expanding entertainment catalog.
With streaming majors like Netflix (NFLX), Amazon’s (AMZN) Prime Video, Disney+ (DIS), AT&T’s (T) HBO lacking a comprehensive sport streaming service, with the exception of ESPN probably, FuboTV is tapping into a fragmented market which has failed to provide consumers with an all-in-one sports streaming service since forever.
Back in September, I had praised the company’s rapidly growing financial and massive unlocked potential when it comes to the potential betting integrations with its platform. FUBO’s most recent quarterly results revealed blockbuster numbers, in line with my expectations.
However, Mr. Market didn’t seem impressed at all, with shares selling off substantially over the past week following the company’s earnings release. Maybe the sell-off is powered by the general unloading of stocks in the industry (e.g., take a look at Roku (ROKU) stock). In any case, the stock’s decline has, in my view, further increased FUBO’s potential upside. With the company’s underlying performance continuing to be robust, I remain optimistic about FUBO’s future, and for this reason, I remain bullish on the stock. (See FUBO stock charts on TipRanks)
Recent Developments and Results
During the past quarter, FUBO made many positive developments, which should position the company in an advantageous position in terms of access to streaming rights, enhancing the overall value proposition for its subscribers. Such developments include:
- In July, fuboTV gained market access in Pennsylvania for its Fubo Gaming streaming platform. FUBO will provide state-wide mobile access for both sports betting and iGaming, helping meet the company’s growth target of setting a footprint across every possible State.
- Then, the company entered into a multi-year distribution partnership with CuriosityStream (CURI), enhancing its offering catalog.
- Additionally, in August, FUBO utilized September’s Conmebol World Cup qualifying matches to integrate free-to-play games, and FanView live statistics on its platform. On the same day, the company’s subsidiary FUBO Gaming obtained approval from the Iowa Racing and Gaming Commission (IRGC) to offer advance deposit online sports wagering in Iowa State, which the company has been running for just over two weeks now.
In my view, FUBO is executing its rapid expansion plan rapidly and thoughtfully. That was once again illustrated in its most recent explosive results.
Revenues grew 156% year-over-year to $156.7 million, with subscribers growing 108% year-over-year and 39% sequentially, to 944,605. Furthermore, the company was again able to extract more dollars from each subscriber, with ARPU growing 10% year-over-year to $74.54 per month.
It’s noteworthy that FuboTV’s ARPU is multiple times higher than any other streaming service out there, driven by FUBO’s dynamic investments in its content catalog, smart bundling, and upselling tactics. In my view, the direction the company’s trajectory is heading towards points to further ARPU growth moving forward. That’s especially so when considering that FUBO’s betting initiatives are in their early stages.
The biggest risk shareholders face at the moment is a potential dilution at the stock’s current, somewhat depressed levels. Other than that, however, FUBO’s investment seems too good to overlook, in my opinion.
Wall Street’s Take
Turning to Wall Street, FuboTV has a Moderate Buy consensus rating, based on five Buys and three Holds assigned in the past three months. At $46.33, the average FUBO price target implies a 116.29% upside potential.
Disclosure: On the date of publication, Nikolaos Sismanis had a beneficial long position in the shares of FuboTV through stock ownership.
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