The ongoing shift of consumers from traditional television to connected TV platforms provides multi-year growth opportunities for online streaming platforms. Thanks to the secular industry trends, fuboTV Inc. (FUBO), a sports-focused live TV streaming service provider, is witnessing rapid growth in its paid subscriber base and ARPU (average revenue per user).
fuboTV is firing on all cylinders and has delivered a robust financial performance in the first half of this year, as reflected in its stock price. Notably, fuboTV stock has rallied 80% in three months. (See fuboTV stock charts on TipRanks)
Recently, the company posted better-than-expected Q2 results, and once again revised its 2021 guidance upward.
Its Q2 revenues of $130.9 million jumped 196% year-over-year and surpassed the Street’s estimate of $118.9 million. The outperformance of its top-line reflects a 281% jump in its advertising revenues and an increase of 189% in subscription revenue.
Its adjusted loss narrowed down to $0.38 a share compared to a loss of $1.46 a share in the prior-year period. Furthermore, it compared favorably to the analysts’ estimate of a loss of $0.50 per share. (Read more: fuboTV Delivers Stellar Q2 Results; Shares Surge 16%)
fuboTV’s subscribers grew 138% year-over-year. Meanwhile, ARPU increased by 30% to $71.43, which is encouraging.
Citing macro tailwinds, the company raised its revenue and subscriber growth guidance for the second time this year. fuboTV now expects 2021 revenues to be in the range of $560-$570 million, up from its previous forecast of $520-$530 million. Moreover, the company expects its subscriber base to reach 910,000-920,000 in 2021, even better than its earlier guidance of 830,000-850,000.
In response to its Q2 results, Laura Martin of Needham listed multiple factors, including revenue, paid subscribers, guidance, and ARPU growth, among others, as positives. The 5-star analyst said, “We see FUBO as an inexpensive way for public investors to participate in the US consumer shift toward OTT and Streaming TV.”
Martin’s bull case assumes fuboTV will achieve its new FY21 subscriber growth guidance. Further, she expects the company’s ARPU to rise by 20% for the full year.
Martin has a Buy rating on fuboTV with an ambitious price target of $60. This target implies a possible 88.6% upside for investors willing to buy and hold the stock for the 12-month projection timeline.
Along with Martin, the majority of the analysts are also bullish on FUBO. The Strong Buy consensus rating is based on 6 Buys and 1 Hold. The average fuboTV price target of $42.86 implies 34.7% upside potential to current levels.
Disclosure: Amit Singh held no position in any of the stocks mentioned in this article at the time of publication.
Disclaimer: The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities.
