Fubotv Inc (NYSE:FUBO) appears attractively priced at current levels. Here's why.
Launched in 2015 with an initial focus on soccer, FuboTV quickly became the top-ranked streaming service for soccer fans. It eventually added more channels and wider coverage for sports, including NFL, NHL, NBA, and MLB. Viewers can now enjoy primetime shows and family-friendly movies, making it an increasingly popular streaming service.
As a result, FuboTV now has more than 250,000 subscribers. It was the second live streaming service to provide content through Apple TV (NASDAQ:AAPL) across iOS devices. FuboTV also offers an additional package for Spanish speakers: Fubo Latino.
Overall, the platform now offers more than 100 channels -- with up to 500 hours of streaming -- on multiple devices, along with cloud storage options.
FUBO’s market share rose to 5.8% by the end of Q1 2021, thanks to its efficient brand positioning, as well as its strong positioning in sports. (See FUBO stock charts on TipRanks) This author is bullish on FUBO stock.
FuboTV's Valuation
Given its competitive positioning and strong growth, FUBO is reasonably priced. The stock is priced at 5.02x EV/revenue on a forward basis. Revenue is expected to grow by 160.7% in 2021, and 60.6% in 2022.
Gross margins are supposed to expand from 5.93% in 2021, and to 10.6% in 2022. If margins continue to expand with scale -- which they should, given the asset-light nature and scalability of the business model -- FUBO could very well generate attractive returns from here.
Wall Street’s Take
From Wall Street analysts, FUBO earns a Strong Buy consensus rating, based on six Buy ratings, one Hold rating, and zero Sell ratings in the past three months. Additionally, the average FUBO price target of $43.86 puts the upside potential at 66.6%.
Summary and Conclusions
FUBO is enjoying rapid revenue growth, thanks to its competitively positioned streaming service.
Furthermore, Wall Street analysts are overwhelmingly bullish on the stock, and the current valuation looks pretty attractive relative to its growth prospects and competitive advantages. As a result, the stock looks like it could be a good buy.
Disclosure: On the date of publication, Samuel Smith had no position in any of the companies discussed in this article.
Disclaimer: The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities.