Is this sports streaming name a buy?
It’s time to explore a sports streaming name. Here is the break down of $FUBO, otherwise known as fuboTV.
Current Price: $26.74
52/Wk High: $62.29
52/Wk Low: $8.26
Market Cap: $3.8 Billion
3 Month Performance: 24.84%
Read below for the break down!
fuboTV ($FUBO) is a leading sports-focused streaming platform that provides users with access to a bevy of live sports and a broad collection of on-demand content that can be accessed through a TV, computer, tablet, phone, and more.
Digging deeper, fuboTV is pushing into the sports betting space and is projecting the launch of their Fubo Sportsbook app in the fourth quarter of 2021.
In fact, the Fubo Sportsbook app will serve as one of the company’s next growth legs and interactive functions.
According to management, the app will sync directly with the fuboTV platform, allowing users to digitally bet live on sporting events while watching the event through fuboTV’s core streaming dashboard.
The company is led by director, CEO, and co-founder David Gandler who has led the company since 2015. Gandler boasts experience from the likes of Tim Warner Cable Media, NBCUniversal Telemundo Media, and Scripps Networks Interactive.
The management team consists of leaders with experience from the likes of DramaFever, NBCUniversal, Axios, Spotify, Viacom, and more.
In recent news, fuboTV subsidiary Fubo Gaming completed a market access agreement with The Cordish Companies. The agreement provides Fubo with market access for the Fubo Sportsbook app in Pennsylvania.
The deal will bring the Fubo Sportsbook app to a total of four states following several previous deals. In total, Fubo Sportsbook will be offered in New Jersey, Indiana, Iowa, and now Pennsylvania.
Briefly exploring the digital sports streaming space, market growth has been rapid. In fact, according to eMarketer US digital live sports viewers are expected to top 74.6 million by 2023 and eventually expand beyond 90 million viewers in 2025.
Digging into the numbers fuboTV missed Q2 2021 expectations with an EPS of $-0.68, lower than the analyst’s EPS consensus estimate of $-0.50. On a quarter-over-quarter basis, EPS declined from $-0.59 in the first quarter.
While EPS missed expectations, revenues continued to expand with Q2 total revenue jumping 196% year-over-year, bringing total revenue to $130.9 million.
Breaking down revenue, advertising revenue impressed, increasing by 281% year-over-year to $16.5 million. Furthermore, subscription revenue accelerated by 189% year-over-year to a strong $114.4 million.
Expanding on subscribers, total subscribers landed at 681,721, representing a significant 138% improvement year-over-year and 15% jump quarter-over-quarter.
Sifting through user data, Content Hours Streamed increased by 148% year-over-year to a solid 245 million in the second quarter. For reference, content streaming hours totaled 99 million hours in Q2 2020.
Rounding out user metrics, average revenue per user (ARPU) expanded by 30% year-over-year to $71.43 per user. For reference, the 2Q 2020 ARPU level was $54.59 per user.
Diluting ARPU, advertising ARPU totaled $8.70, representing a sizable 62% improvement year-over-year. Do note, the Q2 2020 advertising ARPU totaled $5.37.
Rotating into margins, adjusted contribution margin landed at 8.3% in Q2, representing a strong 316 basis point improvement over the same time 2020 level of 5.1%.
While user metrics, subscribers, and revenues continued to expand net loss widened in Q2 to $-94.9 million, representing a 29% expansion of net loss.
On the flip side, net loss margin improved over the comparable quarter, with net loss margin landing at -72.5%. When compared to Q2 2020, net loss margin improved by 9,412 basis points.
Rounding out the quarter, adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) totaled $-47.4 million, representing a 13% decline year-over-year.
Leadership was upbeat after the quarter.
“We are very pleased with fuboTV’s performance in the first half of 2021 and believe that we are well positioned to continue to execute on our long-term financial and operating goals,” executive chairman Edgar Bronfman Jr. said.
Looking to the future, leadership is expecting $140 million to $144 million in revenue throughout Q3 and $560 million to $570 million in revenue throughout the full year 2021.
On the subscriber front, management is expecting Q3 subscriber count to land within a range of 810 thousand to 820 thousand subscribers.
Shifting into the balance sheet the numbers are solid.
Total Debt: $313 Million
Total Liabilities: $525 Million
Total Assets: $1.143 Billion
Cash & Short Term Inv: $407 Million
On a valuation basis, fuboTV does trade at a premium.
Price to Sales: 9.95x
Price to Book: 6.09x
Management could be more effective.
Return on Equity: -167.97%
Return on Assets: -56.32%
Return on Invested Capital: -73.71%
Given the numbers, the analysts are bullish with a mean price target of $43.86/share, representing a 64.02% upside.
The high price target is $60.00/share, representing 124.38% upside while the low price target is $30.00/share, representing a 12.19% gain.
The big money is less involved with just 38.85% of fuboTV being owned by institutions. Top holders include The Vanguard Group, BlackRock Institutional Trust, and Goldman Sachs Group.
On a technical basis, fuboTV could be presenting an opportunity. According to the six-month charts, the MACD is moving with minimal upside momentum within a tight range around 0.09.
The six-month charts are also indicating an RSI of 45.88 and CCI of -5.5249, both of which are on the low end.
Sifting through investor sentiment the bears believe a tough competitive landscape in the streaming industry and semi-late entry into the digital sports betting space will hinder growth.
On the flip side, the bulls believe fuboTV provides a unique streaming and sports betting opportunity that will outperform larger competitors due to their one-off dashboard and business strategy.
In short, fuboTV ($FUBO) is a compelling long-term streaming and sports betting play boasting a solid balance sheet, expanding revenues, growing subscribers, and a reliable management team.
EAT - SLEEP - PROFIT
Disclaimer: This is not direct financial advice, simply an opinion based on independent research.