New York-based FuboTV (NYSE:FUBO) bills itself as the leading sports-first live TV streaming platform. There’s truth to that claim, but there’s another revenue stream that the company can benefit from — and which FUBO stock traders should consider a major advantage for FuboTV.
Don’t get me wrong. If you want to wager on the cable cord cutting revolution, you’re certainly welcome to take a position in FuboTV.
Moreover, your timing would be good as FUBO stock is down from its peak price. Indeed, the “meme stock” hype seems to have come and gone.
Sure, the Reddit and Robinhood traders might push the stock back up again. Yet, there are other reasons to believe that FuboTV shares are a worthy addition to your portfolio.
FUBO Stock at a Glance
As I alluded to earlier, FUBO stock got caught up in the “meme stock” phenomenon a few months ago.
Thus, being the target of a short squeeze may have contributed to the stock’s meteoric rise. Incredibly, FuboTV shares ascended from $5 and change in September of 2020, to a 52-week high of $62.29 in December.
It’s usually not recommended to chase after vertical price moves. FUBO stock provides a perfect example of this.
After plunging to $24 in early January 2021, the stock catapulted to $52 in February before commencing a steady decline.
On the morning of May 7, FuboTV shares were trading near $18. So in effect, you have a chance to turn back the clock and buy the stock at its pre-hype-phase price.
And if you believe in FuboTV’s business strategy, which now involves both betting and live sports, then this may be an opportune time to pick up some shares of FUBO stock at a bargain price point.
Cord-Cutting Tailwinds
Before we get into the sports book angle, it’s worth exploring FuboTV’s potential as a growth story in the cord-cutting movement.
InvestorPlace Analyst Luke Lango emphasized this point, and even offered a pair of powerful stats that FUBO stock holders should appreciate.
First, Lango cites a report “from S&P Global [projecting that] legacy MVPDs (cable, satellite, and telecom) are set to lose 8.2% of their subscribers this year, and 10.3% in 2022.”
Second, eMarketer expects connected TV video ad spending to increase by 54.4% in 2021, largely due to accelerating cord-cutting trends and a rebound in ad spending.
Amid this bullish backdrop, FuboTV stakeholders have every reason to believe that the company will thrive in 2021.
In that vein, FuboTV expects to increase its subscriber base by up to 41% year-over-year to 770,000 in 2021.
That’s a steep growth trajectory, but there’s more to the story. In 2021, FuboTV also plans to “expand into wagering” — and that diversification should greatly enhance the company’s value to the shareholders.
Betting on a Sports Book Business
Earlier this year, FuboTV diversified its business model by acquiring sports betting and interactive gaming company Vigtory.
In doing so, FuboTV dove head-first into the online wagering market, which “Zion Market Research estimates will become a $155 billion industry by 2024,” according to FuboTV’s press release.
There are always risks involved in modifying a company’s business focus. Still, it’s clear that FuboTV is delving into a potentially lucrative industry.
The company’s new product (fubo Sportsbook) is expected to launch in the fourth quarter of 2021. This is subject to local regulatory approvals, however.
FuboTV CEO David Gandler doesn’t view the addition of Sportbook as “simply an add-on product.” Rather, Gandler sees “a real flywheel opportunity with streaming video content and interactivity.”
It’s a sensible approach. After all, sports TV fans are an ideal target audience for sports betting opportunities.
Combining the live-streaming service with the sports book could provide FuboTV with cross-selling opportunities. With more ways to monetize, the company’s revenues could expand quickly.
The Takeaway
Jumping into the sports betting business might seem like a bold move for FuboTV. Yet, given the company’s target audience, it’s actually quite sensible.
And with FUBO stock trading at a low price point, perhaps it’s time to wager on a few shares now.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
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