FuboTV Stock Up 9% – Time to Buy FUBO Stock?

FuboTV stock is surging almost 9% this morning while the stock accumulates an 11.3% gain since the year started as the company’s user base and revenue growth has accelerated in the past couple of quarters.

This morning’s single-day uptick has been prompted by the company’s outstanding Q2 2021 results, as FuboTV added a total of 91,291 new subscribers during the period resulting in 681,721 total users within its platform for a 138% jump compared to the number of users it had during the same period a year ago.

Meanwhile, revenues surged 196% compared to the same quarter in 2020 at $130.9 million including $16.5 million from advertising – a growing segment that could further fuel the company’s growth in the future.

Additionally, Fubo reported average monthly revenues per user (ARPU) of $71.4 – up 30% compared to the previous year – along with a significant jump in the number of streamed hours, which landed at 245 million hours compared to only 99 million hours users streamed during Q2 2020.

The consensus revenue estimate for the quarter was $121.4 million while analysts were expecting to see the firm’s adjusted net loss per share landing at $0.49 – an estimate that Fubo beat as well as it reported net losses per share of $0.38.

Moving forward, the company ramped up its guidance for the entire year, now expecting to see its subscriber base growing to around 920,000 users while revenues are expected to land at $570 million by the end of the year.

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FuboTV Stock – Technical Analysis

Today’s post-earnings uptick is being accompanied by elevated trading volumes, with a total of nearly 20 million shares exchanging hands so far in the session – a number that is 4 times higher than the 10-day average.

Meanwhile, the price action is leaving behind a bullish price gap that could serve as support moving forward while momentum indicators are starting to tick higher, with the Relative Strength Index (RSI) moving near overbought levels while the MACD has just crossed above the signal line on what has been its third consecutive day of positive momentum readings.

These readings are supporting a bullish outlook for FUBO stock. However, traders should wait until the price breaks above the stock’s $33 resistance before jumping on board as there has been some significant selling during today’s session.

It is worth noting that FuboTV’s short float is particularly high at 18% as indicated by data from Finviz. This results in a total of 22.9 million shares being borrowed by short-sellers. It is still unclear how many of those short-sellers were flushed out as a result of today’s uptick but it would be plausible to see this percentage lowering in the following days if the price jumps above the $33 level.

FuboTV Stock – Fundamentals Analysis

FuboTV exhibits all the characteristics of a promising growth stock as its revenues, subscriber base, average revenues per user (ARPU), and EBITDA margins have been moving in the right direction in the past two years at least.

The chart above shows how full-year revenues should have been growing at an accelerated pace, moving from $146.5 million in 2019 to $261.5 million last year while they are expected to more than double by the end of 2021.

Meanwhile, if the company lives up to its forecasts for this year, Fubo’s user base would end up tripling in just two years while the growth of other revenue streams such as advertising and the upcoming sportsbook offering should maintain Fubo’s ARPU at its current levels or higher.

In this regard, as more advertisers jump on board and the sports betting feature is released, it would be plausible to see Fubo’s ARPU jumping to at least $100 per user per month. Meanwhile, if its subscribers by the end of the year surge as expected and the company manages to double its subscriber base by the end of 2022 we could see Fubo delivering revenues of at least $2.2 billion next year based on these assumptions.

At its current market capitalization of $4.5 billion, the company would be trading at only 2 times that estimate which makes it a fairly undervalued growth stock. Based on these assumptions, the market capitalization of the company could easily double or even triple once the market recognizes its promising growth prospects considering both its historical performance and untapped opportunities.

This morning, Wedbush analyst Michael Pachter upgraded the company to outperform while he increased his price target for FUBO to $53 per share. Moreover, BMO Capital’s analyst Daniel Salmon also hiked his price target for FuboTV from $25 to $30 and Roth Capital did the same by raising its 12-month forecast from $42 to $45.

These revisions could support further upward movements for the stock in the following days and the elevated short float could exacerbate the uptrend as short-sellers could be forced to cover their exposure once they recognized that the firm’s fundamentals have been improving to a point that makes the current valuation attractive.

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