A lot has happened to fuboTV (FUBO 1.89%) since it went public nearly five months ago. The live TV streaming platform has been a winner, more than tripling from its IPO price of $10. However, the shares also kick off this new week trading 43% lower than the all-time high it scored over the holidays.
It's fitting that fuboTV bills itself as a "sports-first" streaming service since it has become fiercely contested battleground stock. There are notable investment analysts on both ends of the spectrum, with Wall Street pros setting price targets as low as $6.50 to as high as $60. The shares are roughly in the middle of this tug-of-war, but there's going to be a lot of pulling in one direction later this week when fuboTV reports quarterly results shortly after Tuesday's market close.
Calling an audible
We already know one piece of good news, so naturally it's already discounted from how the market reacts to this week's report. The streaming service that offers roughly 120 different channels -- with a third of them dedicated to live sports -- closed out 2020 with 545,000 subscribers. It's a number that is impressive largely to those who know where fuboTV was just six months earlier.
It didn't seem as if 2020 would be a good year for fuboTV when the magnitude of the COVID-19 crisis suspended major sporting leagues worldwide. The fledgling service saw its paid subscribers contract from 316,000 to 286,000 through the first six months of the year, but sentiment turned the moment that live sports resumed operations over the summer. The last few months have resulted in fuboTV jacking up its year-end subscriber target for 2020.
- By mid-September -- as it was getting ready to go public -- fuboTV was telling investors that it was eyeing 410,000 to 420,000 accounts by the end of 2020.
- When its IPO rolled around in early October the target was raised to 480,000.
- The company announced its third-quarter results in mid-November, lifting its year-end goal to between 500,000 and 510,000.
- In early January 2021 it issued preliminary results that included the big reveal of 545,000 paid subscribers by the end of December.
We're talking about what is effectively three hikes to its year-end subscriber goal in the span of less than 90 days. The larger-than-expected audience wasn't the only good news in fuboTV's January update. Its early read calls for a 77% to 84% year-over-year increase for the fourth quarter it will discuss on Tuesday afternoon, accelerating from a pro forma surge of 71% in the third quarter.
The real driver in this week's report will be any guidance it offers for either the current quarter or for all of 2021. Bears will argue that this is the seasonally sleepy time for live sports, but the year-over-year comparisons could be spectacular given the dearth of sports programming from mid-March to July last year.
Another opportunity to impress the bulls or feed the bears will be how it's holding up with some key metrics. In the third quarter, fuboTV was generating $7.50 a month in advertising per user on top of its already premium-priced subscriptions. Could it keep inching higher as marketers target fuboTV's lucrative audience? Viewers were also averaging four hours a day -- 121 hours for the quarter -- on the platform. Can that already high screen time keep growing?
Average revenue per user was $67.70 a month in the third quarter, 14% higher than where it was a year earlier. Between pricing increases in the latter half of last year and momentum on the advertising front it would be a shock if that metric also isn't on the rise.
There have only been three IPO stocks since its debut that have performed better than fuboTV in the past five months. The heavily shorted shares are volatile, and they should move sharply one way or another in Wednesday's trading session following the fresh financials. Will the bulls win if momentum remains positive and fuboTV offers a rosy outlook on its fantasy sports and gambling optionality? Will the bears win if there are cracks in the growth story or the market doesn't like the growing count of outstanding shares? The home and away crowds are starting to get loud. It's time to play.