Wall Street has given a lot of love to fuboTV (NYSE:FUBO) in the two weeks since it posted blowout third-quarter results. Analysts at Roth Capital and BMO Capital boosted their price targets on the stock after the fresh financials came out. Berenberg initiated coverage of the stock last week with a bullish rating, encouraged by fuboTV's sports bent, tech advantages, and growth potential in the booming online wagering market. This week, it's Laura Martin at Needham raising the stakes. 

Martin initiated coverage of fuboTV three weeks ago with a buy rating and a $17 a share price target. She has bumped that goal higher twice in November, going to $20 earlier this month, and then on Monday to a Street-high $30 based on its rapidly improving fundamentals.

FuboTV displayed on different screens including a TV, laptop, and mobile device.

Image source: fuboTV.

Triple play

It's been a wild run since fuboTV quietly went public at $10 last month, so let's start by getting you up to speed on the business itself. There's been a boom among the video-streaming platforms that have their sights set on replacing old-school cable and satellite television services, which are fading in popularity, as the ongoing cord-cutting revolution demonstrates. Some of the leading players in this growing niche include YouTube TV, Sling TV, and Hulu's Live TV.

FuboTV sought to differentiate itself by emphasizing live sports. "This isn't ESPN on steroids," I argued earlier this month. "It's actually better than that."

The company offers a sports-focused skinny bundle, but skinny doesn't mean cheap. Customers pay at least $60 a month for access to the only digital platform streaming available content in rich 4K. Subscribers have access to 90% of NFL games, 100% of NHL, 88% of Major League Baseball, and 70% of NBA games. There are a lot of premium sports channels included in the subscription. The package also includes a ton of non-sports channels, because even the biggest sports enthusiasts need a break from the games occasionally, or have family members who care about general TV content. 

The first half of 2020 wasn't a great period for fuboTV. It started the year with 316,000 paid subscribers, and was down to 286,000 at the end of June. The pandemic put most sporting leagues on ice, so it wasn't surprising that people were less willing to pay a premium for a platform that largely lacked its signature content. It's a whole new ballgame now. 

Adjusted revenue rose 71% in fuboTV's third quarter. A 58% increase in paid subscribers and a 14% boost in average revenue per user (it's up to $67.70 a month now) combined to result in that better-than-expected growth. Advertising revenue -- a small but growing part of the business -- soared by 153%. 

The company's prospects keep getting brighter as favorable word-of-mouth about fuboTV spreads. Back in September, management said they were hoping to close out 2020 with 410,000 to 420,000 paid subscribers. In October, as the company was going public, they pushed that target to 480,000. Earlier this month, management bumped their end-of-year goal up yet again to between 500,000 and 510,000 paid subscribers. 

Needham's Martin coverage initiation of the stock three weeks ago -- with the $17 price target -- played up fuboTV as a smart and "inexpensive" way for investors to play the consumer shift to streaming video services. Streaming TV may feel crowded with cookie-cutter platforms these days, but fuboTV is unique enough to stand out. Martin saw the potential of high-margin incremental revenue stemming from up-sells, ads, and sports betting. 

Her even-rosier outlook this week follows a refreshed take that finds the COVID-19 crisis accelerated the platform's key upside drivers by as much as two years. We were eventually going to embrace fuboTV and its less sporty rivals to the degree we now have, but the pandemic has sped up the process by giving us more time at home and more incentives to upgrade our home entertainment options. 

The timing of the fuboTV market debut wasn't ideal. It could've priced its offering well above $10 if it had waited until after this month's blowout report, but you won't see IPO investors complaining. It's ultimately all about winning in the fourth quarter, and right now, that's just what the stock is doing.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.