FuboTV stock is trading sharply lower Wednesday after reporting mixed fourth-quarter results.
For the quarter, FuboTV (ticker: FUBO), an online TV provider, posted revenue of $105.1 million, up 98%, and ahead of the guidance range of $94 million-$98 million announced in January. The company reported 547,880 subscribers at year-end, up 73% from a year ago. Hours streamed increased 66% to 205.9 million. Average revenue per user per month was $59.19, up 17%. Subscription revenue was $91.4 million, up 91%, while ad revenue was $13.1 million, up 157%.
The company had a loss in the quarter of $167.8 million, or $2.47 a share, which is wider than the Street consensus estimate for a loss of 73 cents a share—but FuboTV investors are focused more on the potential for the company’s emerging gambling business than on short-term profitability.
For the first quarter, the company projects revenue of between $101 million and $103 million, with subscribers falling slightly on a sequential basis to between 520,000 and 530,000. For the full year, FuboTV sees revenue ranging from $460 million to $470 million, with subscribers increasing to between 766,000 and 770,000. Street consensus previously had called for revenue of $99.4 million for the quarter and $457 million for the year.
FuboTV stock has had an eventful ride in the public markets. The company went public last spring via a reverse merger into a small company called Facebank, then listed on the New York Stock Exchange in October after raising fresh capital at $10 a share. The stock has since traded for as much as $62.29 on an intraday basis, but Wednesday is coming under intense selling pressure, down $13.7%, to $36.14.
While the core FuboTV business is providing a sports-oriented virtual cable bundle, investors in recent months have been more focused on the company’s rapidly developing plans to add a sports-gambling segment. FuboTV intends to offer a free-to–play sports game in the third quarter, with a casino sportsbook to launch before year-end.
In January, the company announced a deal to acquire Vigtory, a sports-betting and interactive-gaming company. One month earlier, FuboTV acquired Balto Sports, a company that develops tools used for fantasy sports games, asserting that the deal “will be instrumental in driving the company’s expansion into both free-to-play gaming and online-sports wagering”
While the stock is selling off hard, most of the Street commentary is laudatory.
Evercore ISI analyst Kevin Rippey repeats his Outperform rating, and raises his target price to $42 from $32. “We remain encouraged, particularly as the timetable on sports betting is moving ahead,” he writes. “At this point, FuboTV’s value is largely predicated on investors’ outlook on their potential success in sports betting. We’re encouraged to hear the company suggest that their sports book will launch in late 2021. We’re far from certain that success will be a foregone conclusion, but the potential upside associated with the company finding success as a differentiated sports-betting platform should continue to inform blue-sky scenarios.”
Oppenheimer analyst Jason Helfstein reiterated his Outperform rating, lifting his target price to $45, from $30. He writes in a research note that the results demonstrated “continued momentum” in the core business, and adds that he has “confidence” in the company’s ability to win licenses for online sports betting.
Wedbush analyst Michael Pacther repeats his Outperform rating, taking his target price up to $53 from $50. “While it is likely that the sportsbook will generate only minimal revenue at launch, we think that the creation of a free-to-play product rolled out to all consumers has the potential to drive word of mouth about FuboTV and ultimately could serve as a catalyst to drive new subscribers,” he writes. “We are optimistic that the sportsbook can be a driver of material revenues and profitability in the next several years.”
Write to Eric J. Savitz at [email protected]
