The stock market continues to hit new highs, but some growth stocks have not participated in the rally this year. Several factors can cause a stock to underperform, including valuation concerns or perceived business risk, but the ones that continue to prove the market wrong can deliver monster returns.

We asked three Motley Fool contributors for three stocks with above-average risk that are worth taking a chance on. Here's why they believe in fuboTV (NYSE:FUBO), CuriosityStream (NASDAQ:CURI), and DraftKings (NASDAQ:DKNG).

A person holding a big stack of money in one hand and a small stack in the other.

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The sports-first streaming service continues to innovate

John Ballard (fuboTV): The displacement of traditional TV with streaming video services will no doubt provide outsize rewards for investors who choose the right stocks. fuboTV is already showing it has the makings of a long-term winner. In the second quarter, it added 91,291 net subscribers that drove revenue up 196% year over year, and it's just getting started. 

fuboTV is what's known as a virtual multichannel video programming distributor (vMVPD). It competes with established players like Walt Disney's Hulu Live, Dish Network's Sling TV, and Alphabet's YouTube TV, but fuboTV is considered the go-to option for those who want to stream live sports, which is its main advantage right now, and management is about to double down on that proposition.

The company recently launched Fubo Sportsbook in Iowa, which integrates a sports betting service with the company's TV streaming service. This is a major growth opportunity, given that U.S. sports betting revenue is estimated to quadruple to $10 billion by 2028. 

With Sportsbook, fuboTV's mobile app delivers a personalized viewing experience that lets users see wagering content for different games as they flip the channels. "We expect this integration will create a flywheel that improves engagement and retention, as well as drives advertising revenue," CEO David Gandler said in a statement. fuboTV's advertising revenue jumped 281% year over year in the second quarter, totaling 12% of its revenue, but clearly, higher engagement from Sportsbook could take fuboTV's ad business to another level.

The stock has been stuck in a trading range over the last year, but more subscriber additions should send the stock higher over the next year and beyond. The stock is up 24% over the last three months at the time of this writing.

This online gaming company is riding the wave of legalization  

Parkev Tatevosian (DraftKings): DraftKings offers three types of online gaming options to consumers: daily fantasy sports, where fans can pick players and assemble teams that compete with teams selected by other fans for cash prizes; mobile sports betting, where consumers can wager on the outcome of sporting events such as who will win the game or which team will score the most points; and iGaming, where folks can bet real money on games like blackjack. 

The company is in the early days of expansion and growing fast. For instance, DraftKings launched its mobile sportsbook to three new states in the most recent quarter alone. Still, the service is only available in 15 states in the U.S., leaving lots of room for growth. Its iGaming product has even more room for growth. While DraftKings offers mobile sportsbooks to 29% of the population in the U.S., it only provides iGaming to 11%.

The pace of this growth into new jurisdictions will depend mainly on the appetite for state legislators to legalize the services. In 2021, 25 such governing bodies introduced legislation to legalize mobile sports betting, and four have introduced legislation to legalize iGaming. The trend is going in DraftKings' favor. Governments find legalizing online gaming a lucrative source of tax revenue without directly taxing their constituents or creating massive land-based casinos that can be an eyesore.

All those new markets are leading to rapid revenue and customer growth for DraftKings. From fiscal 2017 to 2020, revenue expanded from $192 million to $615 million. To make that look even more impressive, the growth rate has accelerated each year. And in the nine months ended Sept. 30, DraftKings increased average monthly unique players to 1.3 million, up from 679,000 in the same time last year.

Investing in gambling companies is a risky endeavor that depends on favorable regulation to its business prospects. That being said, the positive trends and DraftKings' early success make it a growth stock worth taking a chance on

Widening its niche in streaming

Jennifer Saibil (CuriosityStream): Streaming was a balloon that was flying high last year and has kind of deflated over the past few months. But that's because it's ubiquitous at this point. And with so many players, and after skyrocketing pandemic-related growth, the shift is making new growth a little more challenging.

CuriosityStream is a small, niche streaming company that focuses on science and documentary, and it's holding its own among the bigger players. 2020 revenue came in at $40 million, a tiny number, but that was a 120% year-over-year increase. Second-quarter 2021 revenue increased 21% year over year, and the company is expecting an 80% increase for the full year. So while streaming may be slowing down, this niche provider is just getting started.

Subscriber growth was strong in Q2, increasing 56%, and it has the lowest churn of any streaming company except for Netflix. Total subscriptions of 20 million make it a really small company, but that means it's still in its early growth stages. It also has partnerships with larger streaming companies such as Amazon and Roku that up its revenue and give it more exposure.

CuriosityStream went public through a special purpose acquisition company (SPAC) merger in October last year, and the stock is about flat since then after a few ups and downs. It has a fairly small market cap of just over $500 million at this price, and shares trade at a not inexpensive price-to-sales ratio of 6.8. But there's a lot of potential for this small-cap stock, and trading at slightly less than its SPAC debut price, it's a growing stock that you might want to take a chance on.

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.