Growth stocks are under the hammer, and FuboTV (NYSE:FUBO) stock is an unfortunate casualty of the current negative catalysts.
Stock prices have been plummeting for the past few weeks. There are many reasons for this, including rising tensions around Ukraine and Russia. Interest rates and inflation are also affecting the performance of growth stocks.
FuboTV has been in the market since 2014, but it has only recently become a household name in the U.S. The sports-oriented streaming company did very well in its latest quarter, with no sign of slowing down.
However, FUBO stock was having some rough trading during earnings week and is currently trading under its IPO price of $10. Unprofitable companies with high valuations have been falling out of favor for months now, and so the market is seeing no reason to buy those companies despite their high prices.
FuboTv’s Fourth-Quarter Earnings
FuboTV reported $231 million in revenue, including advertising revenue of $26.1 million. The company reported a fourth-quarter net loss of $112 million, or 76 cents per share, compared to the year-earlier quarter when they had incurred losses totaling $195.3 million, or $2.47 a share.
FuboTV closed out the year with 1.13 million total paid subscribers after adding 185,000 in Q4. They streamed 404 million hours of content across all streaming platforms and services in that quarter.
FuboTV expects the business to hit revenue of up to $1.09 billion by year-end in the U.S., Canada and Latin America. Quarter one’s numbers should be especially lucrative, with a projected $232 million to $237 million in revenue for North America. Projections estimate it will have more than 1.5 million to 1.51 subscribers by the end of this year.
The new fuboTV “rest of world” division has revenue projections of $3 to $6 million in Q1 with forecasts of $15 million to $20 million for the entire year. By the end of 2022, 270,000 to 280,000 subscribers can be expected.
Overall, the forecast is a bit muted. It’s a little unusual to have an “off” first quarter, but it’s not unheard of. However, analysts are expecting stronger numbers than the outlook released. That is why shares fell after the report.
Investors want to see stability and profits when the economy is shaky.
While many investors and analysts are worried about the company’s current and future profitability, there are also a lot of believers. The company is still spending more than its sales are bringing in, but Fubo has a vision it is working to fund.
FUBO Stock and the Streaming Market
With so many streaming services available, FuboTV has found a way into the hearts of sports fans by offering an all-inclusive service.
As streaming services have taken over, traditional TV channels are struggling to keep up with the new demands of consumers. The number of people who watch live TV programming decreases each year as more people watch online content on their phones and laptops instead of on their TVs.
Netflix (NASDAQ:NFLX) and Prime Video — Amazon’s (NASDAQ:AMZN) on-demand streaming service — are the two major streaming services.
Disney+, which is Disney’s (NYSE:DIS) streaming service, includes much of the company’s content, including Marvel Studios movies and Star Wars TV shows. The Disney bundle includes Hulu, Disney+ and ESPN+.
Streaming companies like Netflix and Prime don’t have a wide range of sports to stream. FuboTV not only lets people find all the sports they are looking for, but also provides quality content and versatility. Their only major competition is Disney.
Acquisition Paying Off
Even with a lack of funding and a higher-than-average churn, FuboTV still saw its subscriber numbers surge. With data, they can see where customers are getting stuck or frustrated in the app to fix or improve those problems quickly.
With a premium service that costs $99.00 per month, FuboTV offers competitors the opportunity to place wagers or play games against other individuals.
FuboTV’s new sports betting service is sure to be a popular addition for fantasy football enthusiasts. This feature allows viewers to bet while watching. Much of the FuboTV experience is interactive, and with recent acquisition Edisn.ai, they are looking to expand on this principle.
Edisn.ai will allow viewers to keep track of live games or view player statistics and should be an interesting way for fans to interact with ratings as they watch different teams around the league.
In addition, global media company Curiosity (NASDAQ:CURI) has entered into a multi-year agreement with FuboTV, a streaming TV service. This will mean that FuboTV’s Extra package will soon be able to subscribe to Curiosity’s linear channel.
All of the elements mentioned will power FuboTV’s platform moving forward.
The Bottom Line on Fubo Stock
Overall, it’s been a great quarter for FUBO, with an impressive growth rate and some exciting numbers. They also released some numbers that will please their customers and investors. The integration of betting is sure to boost its popularity further.
FuboTV CEO David expects that 50 million households in the U.S. will subscribe to their service and other digital networks in the future. Gandler estimates that 5 million people will be subscribed to their package of channels by 2026. Gandler has said he will consider adding original sports content as revenue grows.
Investors thinking about long-term, high-risk investments may find fuboTV a good option for streaming. It’s not too late to take a small position in FUBO stock since it’s trading at such cheap multiples.
On the publication date, Faizan Farooque 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.
Faizan Farooque is a contributing author for InvestorPlace.com and numerous other financial sites. Faizan has several years of experience in analyzing the stock market and was a former data journalist at S&P Global Market Intelligence. His passion is to help the average investor make more informed decisions regarding their portfolio.
