As a streaming television service with a specialty in all things sports, FuboTV (NYSE:FUBO) has been a significant beneficiary of the return to semi-normal. Unlike other streaming platforms, the allure of FUBO stock is mostly tied to live events. Therefore, the underlying company risked stagnation without compelling sports matchups. Fortunately, that aspect of the consumer economy came back in full force last year, driving significant gains at the time.
However, 2022 is a different story altogether. On a year-to-date (YTD) basis, FUBO stock is staring at a loss of just more than 80%. Although much of society has clawed its way to normalcy, investors have now started to pay attention to FuboTV’s financials — and they clearly don’t like what they see. One of the most problematic issues is the lack of a credible path toward profitability, with 2021 ending with a net loss of $383 million.
Unsurprisingly, some analysts have expressed concerns about FUBO stock. Philip Cusick, an analyst at JPMorgan Chase, recently downgraded shares to “underweight” from “neutral,” driven largely by concerns about the company’s long-term business model and its seeming inability to be profitable. In addition, Cusick noted rising competition in the sports streaming arena and liquidity challenges due to cash burn.
However, not everyone shares a pessimistic view toward FUBO stock. Wedbush’s Michael Pachter shows some favor toward the underlying company, noting that “subscriber growth is continuing at a rapid pace.” Additionally, Pachter appreciates that FuboTV is focusing its marketing spend on targeting potential lifetime customers.
So, where does that leave speculators regarding FUBO stock? It doesn’t take much analysis to realize that the equity unit is not for risk-averse investors. However, those that can handle wild volatility should note that sports viewership is gaining traction, from the NBA and the playoffs going on right now to even women’s sports, an area that has historically encountered challenges. Plus, the steep decline in market value does add appeal for the gambling type.
On the date of publication, Josh Enomoto 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.