On March 3, FuboTV (FUBO) stock was down about 18 percent at $34.14 after the company posted its fourth-quarter earnings results. FuboTV generated revenue of $105.1 million in the quarter, which is a remarkable rise of 98 percent YoY excluding revenue from FaceBank AG. The company blew past Wall Street’s expectation of $93.9 million. FUBO stock has gained 22 percent YTD. So, what’s the forecast for FUBO stock in 2021? Should investors buy the stock?
Founded in 2015, FuboTV is a streaming service provider that mainly offers channels that distribute live sports, including the NBA, NFL, MLB, and NHL. FuboTV is likely benefiting from cord-cutting. The company went public in October 2020 after raising about $183 million in an IPO.
Why FUBO stock is falling
FUBO stock fell significantly after the company reported larger-than-expected losses. In the fourth quarter, the company reported an EPS of -$2.47. The earnings missed analysts' estimates of -$0.73 per share. However, the company added more subscribers than it forecasted earlier. FUBO ended 2020 with 547,880 paid subscribers, which represents a growth of 73 percent YoY.
FUBO stock also fell because investors were worried about the upcoming competition. On March 3, Dish Network and DraftKings announced a strategic partnership. The deal would put DraftKings’ sports betting app on Dish’s platform and essentially provide subscribers with an interactive sportsbook. FUBO competes directly with Dish’s streaming platform Sling TV, which has around 2.5 million customers.
In the first quarter of 2021, FUBO expects its sales to grow 98 percent–102 percent YoY to $101 million–$103 million. The paid subscribers are expected to grow 81 percent–84 percent YoY to 520,000–530,000. Wall Street analysts expect FUBO to have first-quarter sales of $100.7 million.
For fiscal 2021, FUBO expects its sales to grow 76 percent–80 percent YoY to $460 million–$470 million. The company expects its paid subscribers to grow 39 percent–41 percent YoY to 760,000–770,000.
FUBO's stock forecast
According to TipRanks, analysts' average target price for FUBO is $43.72, which is 28.1 percent above its current stock price. Among the nine analysts tracking FUBO, seven recommend a buy, one recommends a hold, and one recommends a sell. Their highest target price of $60 is 75.7 percent above the stock's current price, while their lowest target price of $6.50 is 81 percent below the stock's current price.
Following the fourth-quarter earnings results, Evercore ISI and Oppenheimer raised their target prices on FUBO stock from $32 to $42 and from $30 to $45, respectively. In contrast, BMO Capital Markets lowered its target from $50 to $45.
Why FUBO stock looks expensive
FUBO's NTM EV-to-sales multiple of 8.5x looks expensive compared to other streaming providers like Dish Network. FUBO plans to launch its own sportsbook to integrate with its streaming experience—mainly to generate more revenues and keep viewers engaged. FUBO has acquired Balto Sports and Vigtory—two deals that would help the company introduce a full sportsbook later this year. However, FUBO faces challenges from the Dish-DraftKings partnership.