Whatever your opinion on fuboTV (FUBO), you certainly can’t describe the stock as boring. In its short life span as a publicly traded entity, shares have already managed to soar and pullback dramatically. The sports-focused streaming platform has elicited strong opinions from both the bulls and the bears on whether it represents an opportunity in the move from linear to CTV (connected tv) or is merely overhyped.
However, the bulls have taken hold of the reins again. On Tuesday, shares took off by 34%, after the company announced its plans to acquire Vigtory, a sports betting and interactive gambling company with established sportsbook technology. Investors are clearly pleased with the deal, which will further advance the company’s entry into sports wagering.
This is FUBO’s second ransacking of the online gambling industry. Last month, it acquired Balto Sports, a fantasy sports specialist.
According to Zion Market Research, the online sports wagering market is anticipated to reach $155 billion by 2024. More states are anticipated to come on board, as the need for an additional source of revenue in an economy ravaged by the coronavirus, could see further legislation by previously reticent states.
Wedbush analyst Michael Pachter expects the introduction of sports wagering to “drive engagement in sporting events, new subscriber growth, and the company’s monetization capabilities.”
fuboTV’s platform could be a “compelling choice,” says Pachter, both for new and existing subscribers “looking to wager.”
However, while Pachter remains a FUBO fan, the analyst in not “banking” yet on the new venture’s success.
“We do not think it is a forgone conclusion that fuboTV will succeed at sports wagering, and we have not yet included any contribution from it in our model or in our valuation parameters. There is still much to prove, in our view,” the analyst concluded.
Overall, Pachter stays with the bulls, reiterating an Outperform (i.e. Buy) rating on FUBO shares. Investors could be pocketing gains of ~12%, should Pachter’s $40 price target be met. (To watch Pachter’s track record, click here)
The rest of the Street concurs. FUBO’s Moderate Buy consensus rating is backed by 6 Buy ratings, and 1 Hold and Sell, each. However, the majority expect shares to stay range bound for now, as the current $35.75 average price target indicates. (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.