Headquartered in New York, fuboTV Inc. (FUBO) is a live TV streaming platform with more top Nielsen-ranked sports, news, and entertainment channels than any other live platform. The company offers subscription-based services through which it provides basic plans that allow users the flexibility to purchase add-ons and features they prefer. Users can access the content through streaming devices, as well as on SmartTVs, mobile phones, tablets, and computers. Investors’ enthusiasm for the stock continues to grow. FUBO has been improving its users’ premium and personal viewing experience with the launch of new product features, and new programs.
FUBO was the first virtual multichannel video programming distributor (MVPD) to stream in 4K. A busy sports season, news cycle, and entertainment season led to increased user engagement. As a result, for the third quarter (ended September 30) the company exceeded guidance with solid revenue growth, subscriptions, and engagement. Moreover, over the past year, the stock has rallied 560.3% to close yesterday’s trading session at $62, after hitting its all-time high of $62.29.
This impressive performance and the potential upside based on a few factors have helped the stock earn a “Strong Buy” rating in our proprietary rating system.
Here is how our proprietary POWR Ratings system evaluates FUBO:
Trade Grade: A
FUBO is currently trading significantly above its 50-day and 200-day moving averages of $25.54 and $14.36, respectively, representing an uptrend. Moreover, FUBO has gained 162.2% over the past month, reflecting a solid short-term bullishness.
Driven by continued subscriber expansion, an increase in subscription Average Revenue Per User (ARPU), and growth in advertising sales, the company’s revenue increased to $61.2 million for the third quarter ended September 30, 2020. Subscription revenue increased 64% year-over-year to $53.4 million. While ARPU increased 14% year-over-year to $67.70, paid subscribers increased 58% year-over-year to total 455,000. And total content hours streamed by its users increased 83% year-over-year to 133.3 million hours.
The company’s live TV streaming platform was launched on Hisense Smart TVs with the VIDAA Smart operating system on December 15. It is integrated with the Hisense remote control and comes pre-installed in every model of the new Hisense 9602 smart TV. And on December 11, FUBO added EPIX to its live TV streaming platform. The company acquired Balto Sports on December 1. In October, FUBO announced an agreement with AT&T Inc.’s (T) SportsNet to broadcast it to its channel ahead of the start of the 2020/2021 NHL season.
Buy & Hold Grade: A
In terms of proximity to its 52-week high, which is a key factor that our Buy & Hold Grade considers, FUBO is well positioned. The stock is currently trading just 0.5% below its 52-week high of $62.29.
Founded in 2009, the company only went public in October. By responding to market needs, offering new features coupled with strategic partnerships, the company has sustained its growth over the years.
Peer Grade: A
FUBO is currently ranked #3 of 15 stocks in the Entertainment – Sports & Theme Parks industry. Other popular stocks in the entertainment – sports & theme parks group are Walt Disney Company (DIS), Live Nation Entertainment, Inc. (LYV), and Dover Motorsports, Inc. (DVD).
With a 560.3% gain, FUBO has comfortably beaten the returns of these popular industry participants over the past year. DIS, LYV, and DVD have gained 16.1%, 0.6% and 5.3%, respectively, over the same period.
Industry Rank: A
The Entertainment – Sports & Theme Parks industry is ranked #5 of the 123 StockNews.com industries. The companies in this industry own and operate theme parks, hotels, vacation club properties, entertainment complexes, conference centers, campgrounds, golf courses, water parks, raceways, sports arenas, and other recreational facilities.
This industry received a setback amid the coronavirus pandemic as many theme parks have remained closed. However, some companies in the industry have adapted to the ‘new-normal’ and found new and innovative ways to keep consumers engaged. As theCOVID-19 vaccine distribution rolls out in scale, the economy is expected to recover gradually. Consequently, this industry should grow in the next few quarters.
Overall POWR Rating: A (Strong Buy)
FUBO is rated “Strong Buy” due to its short- and long-term bullishness, solid growth prospects, and underlying industry strength, as determined by the four components of our overall POWR Rating.
FUBO has the potential to gain in the near term, despite appreciating 560.3% over the past year, based on its continued business growth, favorable earnings and revenue outlook, and strong financials. The consensus revenue estimate of $437.64 million for the next year represents a 78.8% increase year-over-year. Its EPS is expected to grow at 60.6% next year.
In the words of Edgar Bronfman Jr., the company’s executive chairman, “We believe fuboTV sits firmly at the intersection of three megatrends: the secular decline of traditional TV viewership, the shift of TV ad dollars to connected TVs, and online sports wagering, a market which we intend to enter. As a result, we believe our growth opportunities are numerous.”
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FUBO shares were trading at $57.25 per share on Wednesday afternoon, down $4.75 (-7.66%). Year-to-date, FUBO has gained 542.90%, versus a 16.95% rise in the benchmark S&P 500 index during the same period.
About the Author: Manisha Chatterjee
Since she was young, Manisha has had a strong interest in the stock market. She majored in Economics in college and has a passion for writing, which has led to her career as a research analyst. More…
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