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fuboTV: Bulls Lose, What’s Next?

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fuboTV (FUBO) has only been a publicly traded entity for six months, but it has had plenty of ups and downs already.

The stock’s latest move was decidedly downbeat; Investors appeared disappointed with the company’s 4Q20 results, sending shares sharply into the red.

The naysayers will point out their main beef still holds: fuboTV remains wildly unprofitable. Earnings per share for Q4 came in at a net loss of $2.47, far higher than the net loss of 73 cents the Street was expecting.

Marketing outlays, and higher subscriber and G&A costs were responsible for the heavy losses.

However, there were many positives to counter the negative bottom-line figure, according to Wedbush analyst Michael Pachter.

FUBO generated quarterly revenue of $105.07 million, higher than its pre-announced range of $94–98 million and ahead of the estimates by $8.53 million.

The subscriber counts also came in higher than the pre-announced figure; FUBO ended 2020 with 547,880 paid subscribers vs. the 545,000 guide and up by 73% from the same period last year. Ad revenue also significantly increased, up by approximately 150% to $13 million.

For FY21, FUBO raised its revenue guidance from the prior $415 – 435 million range to between $460 – 470 million, higher at the mid-point than the $461 million in sales the Street had guided for.

While the company expects a seasonal subscriber dip in Q1, it anticipates seeing out FY21 with 760,000 to 770,000 paid subscribers.

FUBO will also start integrating sports wagering into its platform later this year, first with a free to play (FTP) wagering app in 3Q21 and a sportsbook in the fourth quarter.

“With its raised FY:21 revenue guidance and robust Ad ARPU growth demonstrated throughout FY:20, its recently closed acquisition of Vigtory which advances its sports wagering business, and its late-January cash infusion, we are optimistic about fuboTV’s prospects,” Pachter said.

Pachter believes the sportsbook’s launch won’t bring in much revenue at first but says the free-to-play product has “the potential to drive word of mouth about fuboTV and ultimately could serve as a catalyst to drive new subscribers.”

As a result, Pachter reiterated an Outperform (i.e. Buy) rating, while lifting his price target from $50 to $53. Following the post-earnings selloff, investors are looking at upside of 55% from current levels. (To watch Pachter’s track record, click here)

Most Street analysts appear on the same page. 1 Hold and Sell, each, are countered by 7 Buys, all coalescing to a Moderate Buy consensus rating. The forecast is for 28% upside over the next 12 months, as the $43.72 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.