UPDATED with closing price, analyst comments. Shares in FuboTV have rebounded strongly after the streaming pay-TV bundle operator released preliminary fourth-quarter results showing more subscriber growth and better-than-expected revenue.
The stock closed at $27.32, up 13% for the day, after reaching an intraday high of $30.77. The gain snapped a streak of seven consecutive trading days of losses stretching back to December 22.
Total revenue in the quarter is expected to come in at $94 million and $98 million, the company said, which would be a 77% to 84% gain from the same period in 2019. The company had previously estimated it would reach $80 million to $85 million. (Fubo merged with FaceBank Group in 2020, making the comparisons with the prior-year quarter inexact.)
Fubo expects to have 545,000 subscribers by the end of the year, up 72% over its year-ago tally and ahead of its prior forecasts for 500,000 to 510,000.
Final fourth-quarter numbers will be reported in the next few weeks.
The five-year-old startup has seen its stock become the subject of fierce debate among traders and on Wall Street in recent days. After an IPO at $10 a share in October, it surged to $62 in late December before cratering in recent sessions on waves of bearish sentiment that it was overvalued. Bulls see it as a tech breakout along the lines of Roku or even Netflix.
Media and tech analyst Michael Pachter of Wedbush Securities reaffirmed his “outperform” rating on Fubo shares. He said it will be able to benefit from cord-cutting and an addressable market of about 30 million U.S. households. “We think FuboTV can grow its subscriber base by 50% or more per year for the next several years,” he wrote in a research note, reaching about 1.5 million subscribers by fiscal 2023.
Last month, Needham & Co.’s Laura Martin also restated her “buy” rating, calling the stock “an inexpensive way for public investors to participate in the U.S. consumer shift toward OTT and streaming TV.”
Rich Greenfield with LightShed Partners has been among the loudest voices offering a far more negative take on Fubo’s prospects. He recently slapped an $8 price target on the stock and calling it a “most compelling short” due to its valuation and what he considers deep flaws in the business model of services once called “skinny bundles.” In subsequent days, as the stock ran up and then back down, he has continued to pile on in a series of skeptical tweets.
A lockup of shares from the IPO that expired at the end of December also played havoc with the stock price, enabling some investors to lock in profits and unload shares.
In the internet TV bundle space, Fubo trails Hulu + Live TV, YouTube TV and Sling, which have between 2.5 million and 4.1 million subscribers apiece.
The preliminary fourth-quarter results “exceeded what was already expected to be a record year for the company, and demonstrate continued consumer excitement for the company’s live TV streaming offering,” co-founder and CEO David Gandler said in a press release. “In 2021, we will continue to 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.”
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