FuboTV surges 20% after sports streaming service raises preliminary Q4 revenue guidance

FuboTV
  • FUBO shares are up over 20% on Tuesday after the company raised preliminary revenue and subscriber guidance.
  • Analysts at Needham raised their price target for FUBO to $60/share, citing the potential for a new sports gambling revenue stream within 12 months.
  • Over 80 million shares of FUBO were released from a lock-up on Dec. 30th. According to analyst Laura Martin, this, along with the improved revenue figures and business outlook, signals the bottom for the once struggling FuboTV, perĀ SeekingAlpha.
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After a rocky start to the year on Monday, FuboTV (NYSE: FUBO) announced fourth quarter revenue and subscriber guidance Tuesday morning, and shares are surging.

Previously, the “sports-first” video-streaming platform expected revenue in the last quarter of 2020 to be between $80 million-$85 million. Tuesday’s revised figures bring that number to between $94 million-$98 million, representing a 77%-84% year-over-year increase in revenue.

Paid subscriber growth also skyrocketed some 72% year-over-year. The company expects to boast over 545,000 paid subscribers in their year-end filings. That’s an increase of more than 35,000 over their prior guidance of 500,000-510,000 subscribers.

In a press release, CEO David Gandler touched on Fubo’s 2021 goals saying the company would be “laser-focused on executing our growth strategies, which include continuing to grow advertising revenues, working to implement sports wagering into our product and further establishing FuboTV as a leader in sports and live streaming.”

This comes two weeks after Needham’s equity research team maintained its buy rating and doubled its price target for the rising sports streaming service from $30 to $60 per share.

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Per SeekingAlpha, Needham noted the subscriber growth beat, a live sports button on Hisense’s VIDAA TVs sold at Walmart, a new gambling revenue stream within the year, along with several strong CTV industry consumer, revenue, and valuation fundamental upside drivers as their reasoning behind the bullishness.

Needham analyst Laura Martin also argued the bottom is in on FUBO after a tough 2020 due to a December 31 lockup expiration, which released 88mm shares into the open market.

Martin said in a statement, “we believe FUBO’s recent share price weakness was caused by an enormous supply/demand imbalance as 88mm shares became un-locked-up on Dec 30th, vs. less than 20mm shares in the float, and 8mm shares/day of avg trading volume.”

According to Martin, with supply-demand imbalance resolved and with new revenue figures, the outlook for Fubo is bullish.

FUBO trades around $30 per share and boasts a $2 billion market cap.

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