There is no other way of saying it, 2022 has been absolutely brutal for fuboTV (FUBO) stock. The shares have lost 82% of their value since the turn of the year as investors have turned away from high-growth yet unprofitable names.
And that is essentially the crux of the matter for FUBO. Because while the sports-focused streamer has shown that it can grow at a rapid clip, it hasn’t been able to show that it is getting any closer to turning a profit.
The near-term outlook does not inspire much confidence either, according to Needham’s Laura Martin. With this in mind, Martin has made some changes to her FUBO model.
“We lower our FY22 estimates for FUBO to reflect growing competition in the vMVPD space, slower streaming ad-rev growth, and weakening US consumer spending owing to higher gasoline prices and other inflationary pressures on goods,” the analyst explained.
As such, the revenue forecast is reduced from 1.09 billion to 1.047 billion while the EPS estimate changes from ($2.89) to ($3.20).
There are no changes to Q2’s estimates although the revenue mix between subscription and advertising is given a tweak. Martin now anticipates subscription revenue will reach $201.6 million – amounting to a 76% year-over-year uptick and 3% above her previous forecast. That said, expectations for ad revenue are reduced by 20% to $20.4 million (up 24% YoY). For the quarter, Martin reckons FUBO will show total sub losses of 89,000, of which North America will account for 84,000 and the rest of the world for the remaining 5000.
Looking ahead, Martin expects some of the sub growth to be pushed out of FY22 into FY23, which will lead to higher revenue in FY23, although owing to the company’s wagering initiatives, Martin also expects higher costs next year.
Otherwise, there’s no change to Martin’s Buy rating or $5 price target. Should that figure make the grade, investors will be sitting on gains of ~77% a year from now. (To watch Martin’s track record, click here)
The Street is flashing mixed signals on all things FUBO; on the one hand, based on 5 Holds, 3 Buys and 1 Sell, the stock receives a Hold consensus rating. However, following the shares’ mighty drop, most appear to think they are now undervalued; going by the $5.71 average target, the stock is expected to climb ~102% higher in the year ahead. (See FUBO stock forecast on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
