fuboTV (NASDAQ:FUBO) released its fourth quarter and full-year 2021 earnings on Feb. 23 as well as new guidance for this quarter Q1 2022. As a result, FUBO stock looks like it has a chance of recovering from its steep dive recently.
For example, in the last three and a half months FUBO stock has crashed from a recent peak of $33.87 on Nov. 3, 2021. Now, as of Feb. 24, fuboTV is down to $7.62 per share, a decline of 77.5% in a very short period of time.
That is a big stock crash in a very short period of time. At this point, fuboTV has a market capitalization of $1.21 billion. This works out to a little over 1.18 times its forecast revenue of $1.08 billion to $1.09 billion in revenue for 2022.
Where Things Stand at fuboTV
fuboTV is an up-and-coming streaming service that also allows online sports betting. Its growth rate is still on a steep upward trajectory.
The company reported a higher than expected revenue of $221 million. This exceeded its prior upgraded guidance of up to $220 million in revenue for Q4.
In addition, the company had projected full-year revenue of between $622 million-627 million, but the actual annual revenue was $638 million total revenue.
So, in both the annual and quarterly revenue it exceeded even its own projections.
Moreover, fuboTV now says that it expects to make Q1 2022 quarter revenue of $232 million-$237 million. For the full year 2022, the company made a new forecast and now projects revenue of $1.08 billion-$1.09 billion. So, as I wrote earlier, this puts FUBO stock at just over 1.18 times sales for 2022.
So far, fuboTV is not profitable, as the company lost $82.6 million in adj. EBITDA (earnings before interest, depreciation, and amortization) for the quarter.
The company now has over 1.13 million paid subscribers, which included 183,000 new paid subscribers in Q4 alone. More importantly, it is projecting that it will have 1.5 million-1.51 million for the full year in 2022. That represents an annual growth of up to 33.6% for the year.
This is similar to the growth rate at Netflix (NASDAQ:NFLX) as I pointed out in my last article on fuboTV. This leaves fuboTV stock well off of its real value.
The Bottom Line
This doesn’t explain why fuboTV is now at the lowest point in over three months.
Analysts are very positive about the stock. For example, TipRanks reports that its survey of 8 analysts who have written up the stock in the last three months have an average price target of $20. That represents a potential upside of 112% for FUBO stock.
The same is true at Yahoo! Finance, which uses the Refinitiv analyst survey data. The average price target for FUBO stock from 10 analysts is $29.10 per share, or 282% higher than today.
There is a wide chasm between FUBO stock and its real value. This can’t last for long, at least in the long run.
For example, even at 1.5 times sales, FUBO stock would trade for $1.635 billion or 26.7% more than the $1.21 billion market value it has today. That implies that the price target is $9.65 per share.
However, given that NFLX stock trades for over 4 times sales, we can at least impute a half of that metric for FUBO stock. The reason is that Netflix is profitable but fuboTV is not yet net income profitable.
So at 2 times sales, fuboTV is worth $2.18 billion, or 69% over today’s market value, or $12.88 per share. Moreover, if this takes 2 years to occur, it still provides a 30% annualized compound return over the next 2 years.
On the date of publication, Mark R. Hake did not hold any position (either directly or indirectly) 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.
Mark Hake writes about personal finance on mrhake.medium.com and Newsbreak.com runs the Total Yield Value Guide which you can review here.
