Investors aren't turning off their TVs, but they are shutting off their streaming service stocks. The market's rotating out of the companies that provide on-demand television, and it's hard to find a name that has taken a bigger hit than fuboTV (FUBO +0.00%). The live TV streaming platform has seen its stock plunge 93% since peaking during the holiday season of 2000.
fuboTV traded as high as $62.29 when it began making inroads to add online gambling to its sports-centric streaming service. It's been a losing bet for investors since then, but fuboTV does have another chance to turn heads. The company reports its first-quarter results after Thursday's market close.
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We're in the early innings, but there's a rain delay
It's a tale of two income statement lines when it comes to expectations heading into fuboTV's financial update this week. Analysts see revenue more than doubling to $243 million for the first quarter, up 103% from where it was a year earlier. It's a different story on the bottom line, as analysts see fuboTV's deficit widening to $0.65 a share.
The contrast between the top and bottom lines doesn't end there. fuboTV has routinely exceeded Wall Street's revenue targets. It has posted a larger-then-projected loss in each of the four previous quarters. In short, history and momentum tell us that fuboTV may top $243 million in revenue in this week's report, but it will probably need more than $0.65 a share in red ink to make it happen.
NYSE: FUBO
Key Data Points
The appeal of fuboTV's product is fairly clear. Folks are cutting the cord, but Netflix (NFLX 0.10%) and other traditional streaming services lack the live TV component that consumers find familiar. Live TV streaming services have emerged as a way for folks to pay one price to get all the local channels and cable networks they had -- in real time -- with the added incentive of recording shows they will miss on the cloud to view later. fuboTV tries to set itself apart with an emphasis on sports. Most of the more than 100 channels available on the basic plan are the cable and broadcast networks you know, but it also tacks on more than three dozen channels featuring live sports from all over the world.
It works. fuboTV went from 547,880 subscribers at the beginning of last year to 1.1 million by the end of 2021. It's modeling 1.5 million accounts by the end of this year. Despite passing on the rising costs of programming in the form of price increases, customers keep flocking to fuboTV. The platform also generates industry-leading ad revenue on top of its premium subscriptions. Revenue is actually growing faster than it was when the stock peaked in late 2020.
- Third quarter 2020: 71% revenue growth.
- Fourth quarter 2020: 98% revenue growth.
- First quarter 2021: 135% revenue growth.
- Second quarter 2021: 196% revenue growth.
- Third quarter 2021: 156% revenue growth.
- Fourth quarter 2021: 120% revenue growth.
Thursday afternoon should be its fifth consecutive quarter of triple-digit growth. Investors are clearly concerned with the mounting losses. Analysts see strong revenue growth in the coming years, but profitability is nowhere in sight. The initiatives to roll out predictive games to layer onto its live sports programming as well as an actual sportsbook app have been slowed by regulatory speed bumps and a competitive marketplace that finds gambling stocks in general out of favor. It naturally didn't help that Netflix stunned investors with a sequential decline in subscribers two weeks ago.
Right now fuboTV is at a rough intersection, as video streaming and gambling stocks are temporarily out of favor. However, with fuboTV shares down so sharply at this point, it wouldn't take a lot to crank out a well-received report. The game isn't over yet.
