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Why fuboTV Is Up Nearly 10% This Week

By James Brumley – Aug 13, 2021 at 1:50PM

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The streaming TV player's shares were up more than 28% before stumbling on Friday.

What happened

Even with a wave of profit-taking after the fact, fuboTV (FUBO -7.36%) stock is still on pace to end the week up almost 10% thanks to a major bullish response to Tuesday's post-close release of last quarter's results.

So what

While traditional cable customers continue to cancel their expensive, bloated service, fuboTV continues to add many of those cord-cutters to its ranks. The company added 91,291 (net) subscribers to its streaming-cable customer base during its second quarter, bringing its headcount to 681,721. In addition to collecting monthly service fees from them, fuboTV also increased its advertising revenue to $16.5 million for the three-month stretch ending in June, up 281% year over year.

Businessman plotting a rising, digital stock chart.

Image source: Getty Images.

The initial response to the report was stellar. Already inching higher beforehand, buyers poured in on Wednesday morning, pushing the stock up as much as 17.6% that day, and higher by more than 28% for the week to date. With a chance to look back and think about the movement, though, investors appear to have decided that's a little too much, too fast.

Now what

Long-term owners and watchers of fuboTV stock are certainly accustomed to such volatility, both good and bad; this week's volatility turned from good to bad pretty quickly.

This is also a stock, however, that's becoming less and less volatile the more the underlying company proves itself.

To this end, last quarter's subscriber growth and 196% year-over-year revenue growth mark several consecutive quarters of forward progress for both measures, with more of the same in the cards. Analysts are collectively calling for full-year sales growth of 144%, followed by top-line growth of 64% next year. The company's deeper move into sports wagering -- like the acquisition of sportsbook Vigtory -- should only help bolster the sports-minded service's marketability. Technology market research outfit Technavio estimates the sports betting market itself will grow at an annual pace of 10% between 2020 and 2024, growing by $134 billion during this four-year span.

Given the undertow, fuboTV is a name that merits consideration for more speculative investors. Just know it's apt to remain at least a somewhat volatile ticker regardless of this growth and increasing clarity. Plan accordingly.

James Brumley has no position in any of the stocks mentioned. The Motley Fool recommends fuboTV, Inc. The Motley Fool has a disclosure policy.

Stocks Mentioned

fuboTV Stock Quote
fuboTV
FUBO
$2.39 (-7.36%) $0.19

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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