FuboTV (FUBO) stock forecast: Is it a top growth pick in the streaming industry?
13:36, 22 September 2021
Despite some positive news concerning the company’s growth and future prospects, FuboTV stock has been trading relatively range-bound. What can investors expect from the company as we head to the last quarter of 2021? Can FuboTV shares rise once again to the $60 level or does this consolidation indicate bad news for the sports streaming company?
After a few months of ups and downs during the short-squeezing frenzy that took Wall Street by surprise in the first quarter, the price action for FUBO has calmed. The company has been posting the kind of results that seem to justify – to some extent – the lofty price it once reached at the peak of the meme craze.
In the following FuboTV share price forecast we will discuss the latest FUBO price action and its signals, and take a closer look at how the company’s fundamentals have evolved this year.
FuboTV stock news
This year has been filled with good news for the New York-based sports streaming company. Among the most positive developments, FuboTV has upped its full-year revenue guidance on two occasions (once each quarter) as its subscriber base appears to be growing at an accelerated pace.
Back in August 2021, the company reported total quarterly revenues of $130.9m, giving a 196% year-on-year jump, while Fubo’s subscriber base grew to 681,721 users – up 138% over the same period.
Source: https://ir.fubo.tv/overview/default.aspxMeanwhile, for the full 2021 fiscal year, the company is now anticipating total sales of $570m – more than double the previous year. Total subscribers are expected to land at around 920,000, also more than twice the number the company reported back in 2020.
During the first nine months of the year, Fubo’s management has also been busy securing multiple broadcasting rights, including the qualifying matches for the 2022 FIFA World Cup, and exclusive Serie A and Coppa Italia broadcasting rights for the Canadian market.
The company’s efforts to develop its sports betting unit appear to be yielding results as Fubo has signed multiple agreements with well-established gaming businesses, including Caesars Entertainment, The Cordish Companies, and a multi-year partnership with the New York Jets.
All of these deals are contributing to building the presence of Fubo Gaming, the company’s sports betting arm, in multiple US states, while the company has also secured licences in Iowa and Arizona to offer its sportsbook to customers.
The latest price action in FuboTV has been relatively calm compared to the volatile swings the stock experienced during the meme craze of Q1 2021, when the stock hit the high of $62 a share. In the past few weeks, shares have traded between $25 and $35, while the latest broad-market weakness has plunged its value to the lower bound of that range.
Momentum indicators and trading volumes have been relatively unphased as well and are not currently providing directional signals. However, it’s important to note that the 20-day simple moving average has just crossed above the 50-day simple moving average. This setup is typically known as the golden cross, a bullish signal.
Given the absence of other indicators and the relatively low volatility that the stock has experienced lately, the current FUBO stock projection is not directionally biased unless the price breaks below or above the consolidation rectangle highlighted in the FUBO stock chart above.
FUBO fundamental analysis
FuboTV revenues have rocketed since last year, despite the pandemic prompting the cancelation of most sports events around the world. By the end of 2020, FuboTV reported a significant jump in its top-line results, which landed at $217m, while the company is now forecasting total sales of $565m for the 2021 fiscal year.
By the end of this year, the company is expecting to see its subscriber base tripling compared to the number reported by the end of 2019, while its average revenue per user (ARPU) have been evolving positively. In this last quarter, the company’s ARPU rose to the highest level in its history, reaching $71.43 amid the positive contribution of the advertising segment.
Future growth for Fubo might come from the development of some of the following streams:
Sports betting: the company has secured partnerships with multiple companies in the space to offer a sportsbook in the states where they are licensed to operate, while Fubo Gaming – the company’s sports betting subsidiary – has also obtained licences to offer similar services in a small number of states.
Advertising: Fubo will progressively incorporate more and more sports events and sports-related shows into its programming while, at the same time, it will keep growing its user base. As a result, its advertising revenues may continue to grow on the back of a wider reachable audience.
On the profitability front, Fubo has been trimming its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margins on a year-on-year basis from 140% back in Q2 2019 to 36.2% by the end of Q2 2021. As its revenues keep growing, operating expenses appear to be becoming less of a burden.
By the end of June, Fubo had a total of $407m in cash and equivalents and a relatively small long-term debt of $320m, which includes $308m from a convertible debt issue due in 2026 that generates a 3.25% annual interest expense. Meanwhile, total assets for the same period stood at $1.14bn, including $690m in intangibles and goodwill.
FuboTV (FUBO) stock forecast
At least three analysts reacted positively to Fubo’s latest quarterly report, including Evercore ISI, Roth Capital and BMO Capital Markets. They all lifted their FUBO stock price forecasts for the next 12 months to $40, $45, and $30 a share, respectively, according to data from MarketBeat.
Meanwhile, the consensus price target for FuboTV stands at $40 a share, as of 22 September 2021, resulting in a 57% upside potential. Additionally, 7 out of 8 analysts currently covering the stock are rating it a buy.
FuboTV is valued at $4bn, or 7 times its forecasted sales for this 2021 fiscal year. That’s not necessarily an attractive multiple unless one considers the company’s accelerated growth, perhaps the most important factor to focus on when assessing Fubo’s intrinsic value – the company is tapping a market that’s forecast to grow to $87bn globally by the end of 2028.
Fubo’s future growth may also come from other streams, like sports betting and advertising, rather than being dependent on user base growth to keep pushing its top-line results higher.
If market expectations, which include forecasted sales of $1.4bn by the end of 2023, materialise, the current valuation may be failing to price in the company’s potential growth.
Moreover, these estimations could turn out to be fairly conservative if Fubo manages to ramp up its top-line well beyond these forecasts by incorporating further revenue-generating activities such as gaming.
All things considered, Fubo displays many of the characteristics of a top growth pick in an up-and-coming industry. As a result, a bullish FUBO stock outlook seems reasonable from a fundamental perspective.
This is an opinion drafted upon performing a thorough analysis of the company’s fundamentals but should not be taken as a recommendation to invest in FuboTV stock.
Although it’s impossible to predict exactly the price of FuboTV stock, Wallet Investor has drafted a positive FuboTV stock forecast for 2021-2025, ranging from $40.15 by the end of December 2021 to $96.92 by the end of 2025.
Analysts surveyed by TipRanks expect FuboTV to be a profitable investment option within the next 12 months. The stock got a “strong buy” smart score rating, based on the latest investor sentiment and technical analysis data, as of 22 September 2021.
Another algorithm-based service, Gov Capital, is also bullish about the stock’s prospects. According to their analysis, FUBO stock can hit $36.75 by the end of 2021, continue moving up to $72.13 in 2022 and reach $231.91 in December 2025.
These FuboTV stock predictions are derived from an analysis of the company’s current price trend. They should not be taken as a recommendation to invest in the company. We encourage you to perform thorough due diligence before making a decision to buy or sell any security, including FuboTV.
Edited by Alexandra Pankratyeva
FAQ
Is FuboTV stock a buy?
FuboTV exhibits many of the characteristics of a growth stock including the following:
Accelerated revenue growth
Growing subscriber base.
Steadily increasing average revenues per user (ARPU)
Consistently lower negative adjusted EBITDA margins
A sizable $400m war chest to keep investing in the development of its core business and other promising revenue streams
Manageable debt
You should note that past performance does not guarantee future results. Markets are volatile and the stock’s price can go against your expectations.
Why is FuboTV stock going down?
The price of FuboTV shares has been declining near the $25 level lately amid a shift in market sentiment caused by potential headwinds, including a raging Delta variant in the US, the collapse of China’s Evergrande, a seemingly imminent shutdown of the US government, and upcoming policy decisions from the Federal Reserve.
How high will FuboTV stock go?
It is impossible to predict with 100% accuracy how the price of FuboTV stock will perform at any given point. However, algorithm-based predictions from Wallet Investor have drafted a FuboTV stock forecast for 2021-2025 that sees the stock rising to around $92 and $96 a share by the end of that period. Keep in mind that analyst forecasts can go wrong and the stock can always go against you. We encourage traders to do their own due diligence before making any trading decision.
How to buy FuboTV stock?
You can invest in FuboTV via contracts for difference (CFDs) by signing up for Capital.com’s trading platform.
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