Investors in the live-sports streaming platform FuboTV (NYSE:FUBO) stock have had a volatile 2021. Year-to-date, FUBO is down about 25% to near $20. The all-time high of $62.29 hit in late February seems far away in the rear window.
Founded in 2015, FuboTV offers subscribers access to live sporting events annually as well as news and entertainment content. In addition to streaming revenue, it also has an advertising segment. Earlier in the year, the group acquired Vigtory, a sportsbook platform and gaming business. The Street expects Fubo Sportsbook, its sports wagering app, to be fully operational soon.
The live streaming market has been growing at a fast rate. In 2021, it is expected to reach to a worth of $70 billion while back in 2016, it was worth only just over $30 billion. By 2027, the live streaming market is expected to reach $184.27 billion.
The Street is debating whether FuboTV will be able to claim a bigger share of the growing market. Given the volatility and the recent decline in FUBO stock, market participants now wonder if June could be a could time to enter the shares.
FuboTV’s current market capitalization of $2.9 billion suggests there is much room for growth. If you’re a long-term investor with a two- to three- year time horizon, you could consider investing in FuboTV shares around these levels. Let’s see why.
How Recent Earning Came
FUBO stock’s first-quarter financial results were released on May 11. Total revenue grew 135% from last year to $119.7 million. The net loss of $70.2 million was higher than the $56.3 loss in same period previous year. Basic and diluted loss per share was 59 cents. Cash and equivalents totaled $465 million versus $81,000 a year ago.
Investors were pleased that the company increased the number of subscribers by 105% from the previous year, reaching 590,430. The ad revenues also grew by 206% to $12.6 million. CEO David Gandler said. He continued:
For the first time in any first quarter, we reported sequential revenue and subscriber growth, despite past seasonality trends” and added, “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.
FUBO upgraded its guidance for full-year 2021, and raised the revenue expectations to $520 million to $530 million. Subscriber levels were also raised to 830,000 to 850,000 by year-end. Overall, FuboTV’s results were impressive.
The company’s price-sales and price-book ratios stand at 4.1, and 4.2, respectively. For a growth stock like FuboTV, they do not show an overextended level. In other words, the recent decline in the price of FUBO shares have brought the valuation down to levels that look enticing for the long run.
The Bottom Line on FUBO Stock
Strong Q1 metrics have not provided optimism that could boost FUBO stock in the coming weeks. FuboTV is likely to start creating shareholder value in the coming quarters provided that the current subscriber momentum continues. Then, the advertising segment can keep flourishing. Therefore, investors should keep the stock on the watchlist with a view to buy the dips.
Markets have been jittery in recent days. Thus, I’d not be keen to bottom-pick in a choppy stock like FUBO. However, any further decline below $20 would improve the margin of safety for buy-and-hold investors. As a young stock, the shares will likely have more ups and downs as the business grows. But long-term investors could ignore the short-term noise in the market.
Finally, those investors who do not want to commit full capital to FUBO stock might consider buying an exchange-traded fund (ETF) that has the company as a holding. Examples include the First Trust Dow Jones Internet Index Fund (NYSEARCA:FDN), the iShares Morningstar Small-Cap ETF (NYSEARCA:ISCB), the Roundhill Streaming Services & Technology ETF (NYSEARCA:SUBZ), the SPDR S&P Software & Services ETF (NYSEARCA:XSW), and the Vanguard Small-Cap Value Index Fund ETF Shares (NYSEARCA:VBR).
On the date of publication, Tezcan Gecgil did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Tezcan Gecgil, Ph.D., has worked in investment management for over two decades in the U.S. and U.K. In addition to formal higher education in the field, she has also completed all 3 levels of the Chartered Market Technician (CMT) examination. Her passion is for options trading based on technical analysis of fundamentally strong companies. She especially enjoys setting up weekly covered calls for income generation.