fuboTV (FUBO) is a Cheap OTT Play with a Free Equity Warrant on Sports Betting, Needham Reiterates Buy
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Needham & Company analyst Laura Martin reiterated a Buy rating and $60.00 price target on fuboTV (NYSE: FUBO) on the belief that the company is a cheap OTT play. The 5 key points of the bull thesis are:
1) it participates in CTV industry growth (both subs and advtg) of 30% to 100%/year
2) FUBO represents a low-price competitor inside the $86B/year of US subscription revenue linear TV business
3) strong consumer demand trends
4) revenue stream diversification lowers risk
5) track record of execution excellence
6) LT optionality upside from real time betting on FUBO's TV screen during live sporting events
The analyst stated "While FUBO is focused on growing its installed base of subscribers, we are most excited about high-margin add-on new revenue streams such as up-sells, advertising, wagering, channel fees, etc. From a valuation POV, FUBO is inexpensive because it trades at about 1/3 of ROKU's multiple, and a 25% discount to NFLX's multiple. Wagering multiples are much higher than these, suggesting FUBO is more undervalued compared with that industry."
Shares of fuboTV closed at $22.95 yesterday.
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