Let's play ball with fuboTV (NYSE:FUBO). The "sports first" live-streaming TV provider saw its stock nearly triple last year after hitting the market at $10 just three months ago, but it doesn't mean that every investor was taking a victory lap in 2020. The stock was a six-bagger when it peaked on Dec. 22, only to shed more than half its value in the six final trading days of the year.

FuboTV's new year is off to a surprisingly steady and sturdy start. The stock is trading marginally higher in 2021, bouncing back after bottoming out on Monday. An encouraging financial update on Tuesday helped set the upbeat tone.

But if we've learned anything in the stock's first three months of public trading, it's that it doesn't sit still for too long. FuboTV is a bucking bronco in the Wall Street rodeo.

A family watching soccer from a living room with a grass area rug.

Image source: Getty Images.

Playing to win

All live-streaming TV offerings come loaded with sports channels, but fuboTV is trying to position itself as the top choice for fans of live sporting events. It carries more than three dozen sports channels and became the first platform to play select live events in 4K high definition.

Being a sports-first platform was a liability through the first half of 2020 when leagues suspended their operations. FuboTV contracted from 316,000 paid subscribers at the beginning of the year to 286,000 by the end of June. It's been a whole new ball game in the second half. 

FuboTV was telling investors in mid-September that it would have between 410,000 to 420,000 subscribers by the end of the year. It blasted through that finish line just two weeks later, with 455,000 paid accounts on its roster by the end of September.

Its year-end forecast for subscribers would increase to 480,000 in October and between 500,000 and 510,000 in November. But fuboTV was still aiming too low: Its preliminary read on the fourth quarter finds it topping 545,000 paid subs.

Revenue for the quarter, which fuboTV was previously targeting to clock in between $80 million and $85 million, is now expected to be between $94 million and $98 million. Bears that figured the 71% year-over-year increase in pro forma revenue for the third quarter was a fluke may want to consider going back into hibernation. Its new goal implies accelerating top-line gains of 77% to 84%. 

FuboTV didn't mention how margins and earnings were holding up, but momentum has been favorable heading into the period. Average revenue per user is on the rise, and the gap between that and the lower average cost per user is widening. Ad revenue is growing even faster than subscription revenue, with fuboTV generating roughly a monthly average of $7 per subscriber in its most recent quarter.

Are you going to bet against fuboTV in 2021? Will the bearish calls arguing that fuboTV stock should be trading at $10 or even $8 yield some ground now that the subscriber count has nearly doubled, soaring 89% in just six months? Yes, this is a competitive market. Yes, some of its rivals are part of larger companies with greater resources. Yes, fuboTV peers could tack on more sports channels, embrace 4K, or subsidize their platforms with promotional discounts.

None of this means that this would be the first time that David takes on Goliath with a shepherd sling in streaming entertainment and wins. Spotify (NYSE: SPOT) beat the titans in an even more cookie-cutter scenario. Netflix (Nasdaq: NFLX) exploited its points of differentiation to stand out before the behemoths saw the shot to the head coming. There are advantages to being more nimble and laser-focused than the tech and media stock Goliaths it's competing against here.

I'm not suggesting that fuboTV is the next Spotify or Netflix. A lot can go wrong. But if you believed the bearish argument from Kerrisdale Capital (the short-seller with the $10 price target), how confident are you right now? Kerrisdale data pointed to a "collapse" of gross additions a third of the way into the fourth quarter. How did year-over-year revenue growth accelerate and its year-end subscriber target blow expectations away?

For now, fuboTV will continue to grab a growing slice of the cord-cutters turning to live-streaming TV as a more flexible substitute for their cable and satellite television plans. It will continue to grow its already impressive ad revenue per subscriber given its specialized target audience, and that will happen regardless of how its online gambling potential plays out. After what is now back-to-back blowout quarters out of the gate, dismiss fuboTV in 2021 at your own peril.