I’ve had my eye on FuboTV (NYSE:FUBO) for some time. As a sports enthusiast, I appreciate the platform’s emphasis on live sports. This is a unique selling proposition in the streaming world. I also thought that the company’s sportsbook (Fubo Sportsbook) was an intriguing add-on service that could make the whole of the company greater than the sum of its parts. Or something like that.
So, I took out a small position when the stock neared the $5 mark. That hasn’t worked out so well. And who knows, this may be a case of living and learning. But I’m not giving up on my thesis yet.
For starters, one reason that FUBO stock is dropping at the moment is that Netflix (NASDAQ:NFLX) delivered poor results. And, at the moment, all streaming services are being lumped together.
But FuboTV is not Netflix. There’s a difference between the delivery method and the content being delivered. Netflix has always been about more than cutting the cord. It’s about changing how consumers think about content. FuboTV is more akin to Sling TV and Hulu. It still offers much of the content that consumers would receive from a cable or satellite package. It’s just delivered digitally.
With that said, right now, FUBO stock is going down and it may continue to do so for some time. And if you’re an investor (as I am), you may not get much relief from the company’s earnings report in May. Preliminary estimates suggest that FuboTV will deliver revenue of around $238 million for the quarter. While that’s up from the prior quarter, the rate of growth will be much slower. And with the company being unprofitable, investors may not have much reason to hit the buy button.
On the other hand, FUBO stock has dropped so much that you have to wonder how much of the earnings results are baked into the stock price. I don’t know. Right now, the best I can do is hold on and hope for the best. If Fubo is on your watch list, I’d suggest it stay there. If it starts going up after earnings, you’ll have time to confirm a breakout before jumping on board.
On the date of publication, Chris Markoch held a long position in FUBO. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.