fuboTv Inc.

FUBO Details

fuboTV Inc. (NYSE: FUBO) is a leading sports-first live TV streaming platform and offers the streaming of live sports events, news, and entertainment content. It provides subscribers with access to a wide range of premium content, interactivity, and integrated wagering on the fuboTV platform, through streaming devices such as SmartTVs, computers, mobile phones, and tablets. FUBO’s key operating segments include Subscriptions and Advertising. It currently operates in the U.S., Canada, and Spain.

fuboTV launches on LG Smart TVs: On June 07, 2021, LG Electronics launched the FUBO app on its webOS Smart TVs in the US. The app offers premium viewing features and over 100 sports, news and entertainment channels.

Offering Enhanced CONMEBOL Streaming Experience: On May 26, 2021, FUBO announced that it will launch a dedicated South American Football Confederation (CONMEBOL) service for the Qatar World Cup 2022 Qualifying matches. The subscribers can now stream all qualifying matches and shoulder programming, along with pre-match, half-time, and post-match shows, which will be made available in English and Spanish.

Q1FY21 Results: The company’s total revenue increased 134.53% to USD 119.72 million in Q1FY21 (ending March 31, 2021) compared to USD 51.05 million in Q1FY20. Revenue from the Subscription segment increased to USD 107.11 million, up 130.91% YoY, and Advertising segment revenue increased 205.82% YoY to USD 12.61 million in Q1FY21. The Average Revenue Per User (ARPU) per month for FUBO was USD 69.09 in Q1FY21. The company’s subscribers increased to 590,430 in the quarter, including 43,000 net additions, representing a 105% increase from Q1FY20. However, the net loss for Q1FY21 was USD 70.19 million (primarily due to increased investment in its team, technology, and infrastructure during the quarter) vs USD 66.60 million in Q1FY20.

Note: Q1FY20 figures and YoY comparisons relate to the pro-forma combined FUBO pre-merger and FaceBank Group, Inc. pre-merger (excluding Facebank AG and Nexway, which were sold in July 2020).

Key Risks: FUBO offers content streaming services to its subscribers on internet-connected screens such as TV, digital video players, set-top boxes, and mobile phones through certain key distributors, who may terminate the carriage of these services at any time. If the company fails to deliver its streaming content to the subscribers via these devices due to such termination or otherwise, it could affect its ability to retain subscribers and advance its business.

Outlook: For Q2FY21, the company expects the revenue to be in the range of USD 120 million to USD 122 million and subscribers to range between 600 to 605 thousand. For FY21, the revenue and subscriber estimates are USD 520-530 million and 830-850 thousand, respectively.

Valuation Methodology: EV/Sales Multiple Based Relative Valuation

(Analysis by Kalkine Group)

• % Premium/(Discount) is based on our assessment of the company’s FY21E trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

FUBO Daily Technical Chart (Source: REFINITIV)

Stock Recommendation: FUBO increased by 124.10% in the past 9 months, and is currently trading in the lower band of the 52-week range of USD 8.12 to USD 62.29. The stock is currently trading above its 50 and 200 DMA levels, and its RSI Index is 49.19. We have valued the stock using the EV/Sales-based relative valuation methodology and arrived at a target price of USD 25.01. Considering the significant uptick in stock price, operating level losses despite the tremendous increase in revenue, and current valuation, we recommend an “Avoid” rating on the stock at the current price of USD 28.96, down 3.64% as of July 06, 2021, at 3:05 PM ET.

* The reference data in this report has been partly sourced from REFINITIV.

* All forecasted figures and industry information have been taken from REFINITIV.