What happened
fuboTV (FUBO -0.72%) investors beat the market this week as the stock gained 12% through Thursday trading compared to a 0.2% drop in the S&P 500, according to S&P Global Market Intelligence. The rally erased just a small portion of recent losses for owners of the streaming video service, which focuses on livestreaming sports broadcasts.
It came as fuboTV's management team updated investors about its short-term and long-term growth outlooks.
So what
fuboTV executives held their annual investor day meeting on Wednesday outlining the confidence they have in their business. While subscriber growth trends have slowed compared to earlier phases of the pandemic, fuboTV sees lots of room to add new members and to boost its average monthly payments over time.
These monetization initiatives include a sports betting platform, advertising sales, and upselling options for additional premium channels. Subscribers tend to come for fuboTV's sports offerings, but "stay for the entertainment," management said. Investors were pleased to hear executives outline such a bullish outlook despite the current pressures on the streaming video market.
Now what
fuboTV is still a long way from achieving sustainable profitability. Management is aiming to reach free cash flow positivity by 2025, meaning the next two years will mainly include major spending programs aimed at building the business -- without a guaranteed payoff.
The platform is also relatively tiny, hoping to reach just 1.3 million subscribers in the U.S. market by late 2022. The company might struggle to hit 2 million by 2025, which corresponds with management's goal of roughly 20% compound annual growth.
Still, fuboTV has a solid entertainment platform with many potential paths to take toward profitability over the next several years. If the company can maintain subscriber gains while boosting its average revenue per user, then the stock might see better returns ahead.
