Needham Sees fuboTV (FUBO) Developing Sports Betting Licensing Model, Thoughts From CEO Fireside Chat

Needham & Company analyst Laura Martin reiterated a Buy rating and $60.00 price target on fuboTV (NASDAQ: FUBO) the day after the company announced its sports betting acquisition and hosted a fireside chat with the CEO. Tactically, the company is most excited about the new revenue stream but the analyst thinks this acquisition could have bigger implications and possibly drive a change in the Sports driven television industry.

This acquisition will definitely create a new revenue stream but the analyst points out that it also lowers SAC and adds viewing hours. The real kicker though is potential licensing revenue. She stated "What we are most excited about (from a valuation point of view) is that, IF this nimble scrappy little company successfully integrates sports betting into live TV, it could represent the savior of the linear TV big-bundle (which is sports heavy) and therefore be bought or licensed by every big-bundle TV company in the US". She went on to state "Real time TV-based sports betting revs will be based on different sports than traditional wagering, which is often based on who wins or loses a 2 or 3 hour game. Micro-bets integrated into FUBO sports content on TV will be based on events like tennis serves, golf strokes, and/or strikes vs balls in the MLB, in real time, as the viewer watches the game. Sky UK's biggest source of betting revenue is based on tennis serves, according to FUBO".

Other key points that came from the conversation:

• Purchase price is likely nominal with upside based on synergy driven earnouts
• FUBO expects to launch a free-to-play app by 12/31/21
• Proceeds raised in the IPO were for the video business only, suggesting that FUBO may raise funds
• DraftKings.com got an average of about 16mm visitors each month during 4Q20, of which about 92% were in the US. These stats are similar to FUBO's 15mm MAUs

For an analyst ratings summary and ratings history on fuboTV click here. For more ratings news on fuboTV click here.

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