Investing in fuboTV (FUBO) is not for the faint of heart. In the company’s short life span as a publicly traded entity, shares have been on a dizzy ride, as the bulls and bears have wrestled to take hold of the sports-focused streaming platform’s narrative.
The bull/bear argument rests on whether the company can become a big player in the blooming CTV (connected TV) market or whether it is just catching a ride on this secular trend and lacks staying power.
Barrington analyst James Goss sits in the former camp. The analyst initiated coverage of FUBO with a Buy rating and $40 price target. (To watch Goss’ track record, click here)
So, what does Goss like about FUBO, then?
“fuboTV offers a packaged collection of programming at subscription price levels that provide value relative to both roughly comparable packages from cable and satellite service providers as well as in comparison with the aggregate cost of cobbling together a customized selection of services,” Goss said. “fuboTV’s positioning offers a very attractive proposition, especially for sports fans.”
FUBO detractors say its business model is based on wafer thin margins and is unsustainable in the long term, especially when taking into account the size and resources of many of its competitors (YouTube TV, Hulu).
It’s true, as with many growth-focused names, the company remains unprofitable. However, the analyst believes management is taking a “measured approach to the steps necessary to achieve EBITDA and FCF breakeven and move into positive territory.”
The company has said it views its progress as more akin to a marathon than a sprint and is focused on adhering to its value proposition while creating a “growing and sustainable base of subscribers.”
FUBO has identified several revenue streams through which to do so. In addition to the subscription revenues, the company offers high-margined add-on services, has additional income from advertising and will soon add sports betting to the platform via key acquisitions it recently made. The combination of sports wagering, and live sports streaming could be a potent one.
Goss sums up: “Management has characterized its offerings as ‘come for the sports and stay for the entertainment. This is the theme that differentiates its service offerings from those of other vMVPDs.”
Most Street analysts agree. Barring 1 Sell and Hold, each, all 7 other analyst reviews rate the stock a Buy. (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.
