FuboTV (FUBO) Surges After Crushing Views on New Subscribers Adds, Analysts Positive

May 12, 2021 7:06 AM EDT
Get Alerts FUBO Hot Sheet
Price: $29.26 -0.91%

Rating Summary:
    7 Buy, 1 Hold, 1 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 15 | Down: 13 | New: 24
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FuboTV (NYSE: FUBO) stock is up about 18% in pre-open trading Wednesday after the company presented stronger-than-expected results for its first quarter.

FUBO reported a net loss of $0.59 per share to top the $0.72 loss expected from market analysts. The company said it added 43,000 subscribers in Q1, compared to a decline of 28.000 in the year-ago period. Analysts were calling for a decline in subscribers of 19,500. Total revenue surged 135% to $119.7 million.

“The first quarter of 2021 was an inflection point for fuboTV. For the first time in any first quarter, we reported sequential revenue and subscriber growth, despite past seasonality trends. This tells us that consumers are increasingly cutting the cord. We believe they are choosing fuboTV, enticed by superior value, our year-round content offerings and a customer-centric, innovative consumer product experience relative to legacy pay TV (cable / satellite / telco). We see this trend continuing to accelerate as more consumers discover they can cut the cord without losing access to the sports teams, live channels and content they love,” said David Gandler, co-founder and CEO, fuboTV.

The company reported ad revenues of $12.6 million, up 206% year-over-year. As a result, the full-year guidance has been lifted to a range of $520 million to $530 million.

Oppenheimer analyst Jed Kelly assumed coverage with an “Outperform” rating on FUBO but lowered the price target to $32.00 per share from $35.00 on lower peer valuation.

“We see lower churn as indicative of FUBO's product offering garnering enough customer loyalty that will eventually allow the company to build a larger live sports offering without relinquishing its unit-economic integrity. OSB is on track for 4Q launch (~$50M up-front investment), with free-to-play games beginning relatively soon. We raise our '22 revenue 11% but lower '22 Gross Profit to $107.3M ($125.6M, previously) on reinvesting proceeds into larger content offering,” the analyst said in a note.

Similarly, Needham’s Laura Martin left its “Buy” rating unchanged with a price target of $60.00 per share.

“We believe that FUBO can reach 3mm US subs, out of the 78mm linear TV big bundle subs (as per eMarketer), which we believe would drive 30% gross margins in FUBO's core skinny bundle (vMVPD) business. We calculate that there is material upside to LTV from add-on services to FUBO's core vMVPD business,” Martin wrote in a memo.

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