fuboTV’s (NYSE:FUBO) story so far has been one of strong sub growth countered by huge losses, which can explain 2022’s woeful performance, with loss-making growth stocks seriously out of favor. The question is, can the sports-focused streamer start to rectify that situation when it reports Q4 earnings on February 24?
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Roth Capital analyst Darren Aftahi is not so sure.
“We expect ending subs in-line with guidance and revenue in-line with consensus,” the 5-star analyst commented. “Our delta is slightly larger losses as subscriber-related expenses continue to grow faster than revenue/subs., not a formula for a path to breakeven as it stands.”
That said, Aftahi also adds that he is “slightly encouraged” by what could be said about FUBO’s outlook.
In January, the company announced a $5 monthly hike to its streaming packages, which Aftahi notes should be “mostly incremental” to the bottom line (and has not yet been factored into his model).
Furthermore, in its efforts to “maximize profitability,” the analyst believes the company is applying a much more nuanced approach to every piece of its content. “We believe the narrative could be seen as positive when it reports later this month,” Aftahi adds. Moreover, on account of the “under-monetization of its inventory,” in spite of the weak macro, the company could reap the benefits of improved ad sales.
However, Aftahi also notes that price hikes often result in churn, so it’s hard to tell what kind of impact the price increases will ultimately have.
Nevertheless, while Aftahi remains on the fence for now with a Neutral rating, heading into the print, he is “cautiously optimistic” and thinks there might be early signs of progress on operating losses, “albeit still a fairly ‘robust’ figure, relatively speaking.”
All in all, that Neutral rating comes alongside a $3 price target, suggesting shares are undervalued by ~43%. (To watch Aftahi’s track record, click here)
Looking at the consensus breakdown, 1 Buy and 2 Holds have been published in the last three months. As a result, FUBO gets a Moderate Buy consensus rating. (See fuboTV stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
