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fuboTV Stock Holds Promise Ahead of Q3 Earnings, Says Analyst

Since fuboTV (FUBO) went public just over a year ago, betting against the sports-focused streaming platform delivering on earnings hasn’t been a good tactic; the company has consistently over delivered, in the process, beating Street expectations.

Ahead of Tuesday’s (Nov 9 AMC) 3Q21 print, Wedbush analyst Michael Pachter thinks the company’s ongoing strategy is working according to plan.

“While it is early innings for fuboTV in our view, right now the focus is on subscriber growth and the company has shown that it can adeptly expand its base while growing ARPU, particularly ad ARPU, while keeping expenses under control,” Pachter noted.

To boost engagement on its platform, FUBO has also been adding to its content offerings; These include original new shows boasting exclusive content where there is ample room to “expand advertising.”

Additionally, in early September FUBO launched Free-to-Play Games alongside exclusive South American World Cup qualifier matches. This incidentally also coincided with a massive jump in website traffic. Between August and September, UVs (unique visitors) to FUBO’s website increased by 71% which contributed to a quarter-over-quarter increase of 32% and a 31.5% jump over the same period last year.

This is all before the introduction of sports wagering. On November 3, FUBO launched its first mobile sportsbook in Iowa, and more are expected to follow this quarter. Subscriber growth has been extremely healthy – the subscriber base tripled in two years – but the focus on the sports viewer/bettor should serve to “accelerate subscriber growth.”

Overall, Pachter anticipates Q3 revenue of $143 million, just below the Street’s call for $144 million and toward the high end of FUBO’s guidance of $140 – 144 million. The analyst expects paid subscribers will hit 825,000 – higher than FUBO’s guidance between 810,000 to 820,000.

Looking ahead, the analyst has yet to factor in any contribution from real money wagering, but notes that the addressable market is “large, and that fuboTV could generate thousands of dollars annually for each real money gambler.”

All in all, ahead of the print, Pachter gives FUBO shares an Outperform (i.e. Buy) rating and a $53 price target. The implication for investors? Upside of 61%.  (To watch Pachter’s track record, click here)

Turning now to the rest of the Street, where FUBO stock has a Strong Buy consensus rating, based on 7 Buys vs. 2 Holds. Shares are expected to be changing hands for ~33% premium a year from now, given the average price target clocks in at $44.63. (See FUBO stock analysis 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.