What happened

Shares of fuboTV (NYSE:FUBO) plunged as much as 15% today after getting a downgrade from Wall Street. BMO Capital dropped its rating from outperform to market perform while adjusting its price target from $33 to $50. As of 12:30 p.m. EST, the stock was down 9%.

So what

FuboTV shares have already more than doubled this month, leading to some concerns around valuation for the sports-centric live TV streaming platform. Analyst Daniel Salmon pointed to the tech stock's recent rally as the primary factor in the rating change. Shares had surged earlier this week following an Axios interview with CEO David Gandler that suggested the company was exploring exclusive content deals.

fuboTV interface on a smart TV

Image source: fuboTV.

"We are downgrading FUBO to market perform following recent outperformance," Salmon wrote in a research note to investors. "We raise our valuation and target again owing to higher streaming comp set valuation and expanded distribution opportunities (e.g., partnership with Hisense and VIDAA) that add upside tension to subscriber estimates."

Now what

Video streaming platforms have seen soaring demand and engagement during the COVID-19 pandemic, which has forced people to spend more time at home. Meanwhile, consumers continue to shift from traditional cable services to streaming as cord-cutting has accelerated this year.

BMO Capital acknowledges that fuboTV has been executing well with its growth strategy -- paid subscribers jumped 58% to 455,000 last quarter -- but that the long-term opportunities are already being priced in. Salmon argues that the "secular tailwinds and recent execution are reflected at these levels."

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