fuboTV (FUBO 8.81%) stock fared better than most in yesterday's Japan-inspired market rout, losing only 1.5% -- and only half as bad as the S&P 500 index's 3% loss. The good news seemed ready to keep on rolling this morning, too, when fuboTV reported better-than-expected sales and earnings, inspiring an early 15% pop in the stock.
But then it vanished.
As of 9:45 a.m. ET, fuboTV has already turned tail and moved lower, down 2.3%. This despite the fact that the live sports streaming service reported only a $0.04-per-share loss for its fiscal second quarter of 2024 (analysts expected a $0.15 loss) and the fact that fuboTV recorded revenues of $380.9 million (analysts predicted only $368.2 million).
Sales and earnings
Does fuboTV stock deserve to be sold off despite exceeding expectations this morning? It depends on how you look at the numbers. On the one hand, sales growth was fantastic -- up 26% year over year. Subscriber count climbed 24%, and average revenue per user (ARPU) grew 5%.
On the other hand, that subscriber growth was only in North America. In the rest of the world (ROW), it turns out subscribers grew only 1%, and both revenue growth and ARPU growth were only 2%.
It's also worth noting that fuboTV's "earnings beat" -- that's the $0.04 per share -- was only a non-GAAP (adjusted) estimate. Actual earnings as calculated according to generally accepted accounting principles (GAAP) resulted in an $0.08-per-share loss for the quarter.
Guidance and valuation
Guidance is another issue that may be dogging fuboTV today. Management forecast slowing sales growth in North America in both the Q3 currently underway (17%) and for the full year (18%). And ROW sales will show little improvement, up 4% for the full year, according to management, but up only 1% in Q3.
Long story short, fuboTV remains unprofitable and isn't expected to become profitable for at least a few more years -- yet growth may already be slowing down. It's hard to build a buy thesis on facts like those.
