What happened
Shares of fuboTV (FUBO -3.50%) fell 20.4% in February 2022, according to data from S&P Global Market Intelligence. The chart continued to trend downward after a 31% plunge in January. The main force that pushed down this stock was a broad-based investor retreat from risky growth stocks, punctuated by a disappointing earnings report from media-streaming platform provider Roku (ROKU 0.15%).
So what
Roku posted strong earnings but soft top-line sales in the fourth quarter, driving that company's stock 22% lower the next day. fuboTV followed suit with a 13.5% haircut as investors jumped to the conclusion that streaming video must be falling out of favor in general. As a provider of live TV services over a digital streaming platform, fuboTV depends on hardware and software platforms on which its media streams can be presented, and Roku is a leading supplier of these crucial devices.
However, when fuboTV delivered its own fiscal update for the same reporting period, the company largely proved the bears wrong. Revenues rose 120% year over year to $231 million, and the bottom line showed an adjusted net loss of $0.57 per diluted share. The average analyst had expected a loss of $0.67 per share on sales near $213 million. fuboTV shares rose 10% the next day, softening the blow from Roku's fallout.
Image source: Getty Images.
Now what
Market makers placed less weight on fuboTV's impressive results than on the market health readout they had gleaned from Roku and others. Don't forget that streaming giant Netflix (NFLX -3.92%) also missed analyst targets in its latest report, adding more gloom to the overall analysis of streaming stocks. This is a rough time for the streaming media subsector, but fuboTV delivered strong results and bullish next-year guidance anyway. I'm scratching my head over this excessively negative market reaction, and I'm sorely tempted to pick up a few shares for myself at these bargain-bin share prices.
