Adding new subs or hitting revenue targets have rarely been an issue for fuboTV (FUBO) and the latest update from the sports-focused streamer stuck to that narrative. On Monday, the company raised its revenue and new subs expectations for Q3.
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The company now expects total revenue for the quarter to reach at least $215.5 million, up from the prior range of $205 million to $211 million. And while its previous guidance for paid subscribers was in the range between 1.48 million and 1.52 million, FUBO now sees that figure hitting at least 1.57 million. The Street was calling for revenue of $209.6 million and 1.44 million total subscribers.
At the same time, the company said it has decided to abandon its sports wagering initiative. Following a strategic review, FUBO has decided to cut its losses and move on from the costly venture as it seeks a road to profitability.
Losses have always been the main problem for FUBO. The company has been a cash burning machine but believes it can turn FCF positive and attain an adjusted EBITDA margin of positive 15% by 2025.
Wedbush’s Michael Pachter thinks the company has to deal with several near-term hurdles which include “slowing subscriber growth, fierce competition, inflation, and rising content costs.”
That said, along with a “solid head start” in live sports programming and a “thriving and growing advertising business,” Pachter’s concerns are alleviated to a degree by “1) fuboTV shuttering its costly sports wagering business, which should improve its cash burn in the near-term; and 2) positive Q4 catalysts including the new upfront cycle hitting (we think fuboTV had a more successful upfront year-over-year) and expected original content around the upcoming World Cup (November and December).”
In fact, all told, with the shares still down by 63% year-to-date, Pachter considers the current share price a “compelling entry point.” Along with an Outperform (i.e., Buy) rating, Pachter’s $6 price target makes room for 12-month gains of 63%. (To watch Pachter’s track record, click here)
The Street’s analysts are almost split down the middle on this one; the stock claims a Moderate Buy consensus rating, based on 3 Buys vs. 4 Holds. On where the share price is heading, however, the outcome is more conclusive; at $6.20, the figure suggests shares will climb ~68% higher over the one-year timeframe. (See fuboTV stock forecast on TipRanks)
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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.
