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4 Reasons to Buy FuboTV Stock Like There’s No Tomorrow

4 Reasons to Buy FuboTV Stock Like There’s No Tomorrow

Most investors are so focused on the risk of this ticker that they fail to notice the chances of a large reward.

Say fuboTV (FUBO 5.30%) has been a mediocre performer of late would be a considerable understatement. Shares are down 98% from their late 2020 high, and still within sight of multi-year lows hit in June. The stock’s bullish euphoria created by the COVID-19 pandemic clearly did not last. The lack of profits probably didn’t help matters either.

Still, if you can digest the risk and volatility this ticker brings, there is a four-legged bullish argument for entering this stock sooner rather than later.

What is FuboTV?

In case you’re reading this and didn’t know, fuboTV is a streaming alternative to conventional cable TV service like you might purchase from Spectrum or Xfinity. It offers the same (mostly) network broadcasts and cable programming you’d expect, but delivers them as a digital stream.

Even among similar cable alternatives like Alphabetis YouTubeTV and DisneyHulu+Live from , however, fuboTV stands out. It specializes in sports, providing easy access to all major sports channels as well as some sporting events (such as soccer games played in foreign leagues) that would not otherwise be available to American fans.

And it works. Since launching as a narrowly focused sports streaming service in 2015 and slowly evolving into a full-fledged cable alternative, the company now has 1.6 million subscribers to its cable-like service and another 400,000 subscribers to its leaner sports package offered abroad. .

FuboTV's customer base continues to grow as more consumers embrace the cable TV alternative.

Data source: FuboTV. Table by author. The numbers are in the thousands.

Revenue last quarter also reached $386 million, pushing fuboTV even closer to profitability.

FUBO Revenue Chart (Quarterly)

FUBO revenue (quarterly) data by Y Charts

It is obvious that not all investors see or believe in this progress. And that’s understandable. After all, the television business is changing. Namely, even though it’s not “cable TV,” fuboTV still faces the same fundamental difficulties resulting from rising prices as well as the rise of other streaming platforms like Netflix and Disney+.

Still, there’s arguably more work in favor of fuboTV than against it. Same for the stock.

Four reasons to buy fuboTV stock

So what makes this unprofitable laggard such a compelling pickup when it’s so far down from its peak price? Four main reasons, one of which has already been mentioned: its sporting orientation.

A recent survey by CableTV.com tells the story, indicating that the number one reason people still subscribe to cable (even when they don’t have to) is continued access to live sporting events .

Consumers’ willingness to pay exorbitant prices for access to sports programming hasn’t really stopped the cable-free movement, for the record. But that could ultimately slow it down, a harbinger of stagnation. If and when that happens, look for more and more cable customers to migrate to fuboTV’s sports-focused service.

We also see the streaming market share of the cable TV market following the same fundamental footsteps that its coaxial cable cohorts left behind as part of their rise and subsequent fall. This amounts to imposing price increases that simply push consumers too far. YouTubeTV, for example, recently increased its monthly price by $10 to a base rate of $82.99 per month, which is more with all the add-on channels. The more than 8 million subscribers to this service now have a wise choice to make in terms of costs. Alphabet’s decision follows a similar decision Disney made for its Hulu+Live service around the middle of this year.

That doesn’t mean fuboTV is immune to future price increases. However, it is certainly better protected against forces that need it. Although it offers most of the programming available via mainstream cable, it makes a point of not carrying some of the less-watched cable channels, which would make its service unnecessarily more expensive to purchase.

Whatever fuboTV is or isn’t, it clearly works. The company continues to add net subscribers to its flagship service and expects further user growth in the three months ending this month. But more than that, this continued revenue growth brings the cable alternative closer to profitability. At its current rate of progress, fuboTV could move out of the red and into the black by 2027.

FuboTV's revenue and earnings are expected to continue improving through 2026, but will likely do so well beyond then.

Data source: StockAnalysis.com. Table by author.

The market could at least reward a few of this progress along the way.

And this perspective highlights the fourth key reason to buy fuboTV stock. Simply put, fuboTV stock is simply undervalued.

It is certainly difficult to determine an appropriate price for the shares of a company that is not only not profitable, but will not become so any time soon. It is not impossible to make reasonable assumptions based on the information you have. TO DO have, however.

To that end, the analyst community is willing to say that this company’s shares, in their current state, are worth $2.38 each, more than 70% above the current stock price. They may be taking advantage of the fact that the stock is only valued at a fraction of earnings per share, earnings that are likely to become profitable at some point in the foreseeable future.

At the very least, these are qualities, features and numbers that an investor interested in getting into the streaming cable business might appreciate.

Keep it in perspective

To be clear, FuboTV isn’t a great fit for anyone’s wallet, and it’s certainly not a fundamental holding type for anyone’s wallet. There is a higher than average risk here, if only because of the the uncertainty surrounding this company. Not to mention the fact that federal legislation to regulate fuboTV, just like a conventional cable company, has been proposed, which could increase its operating costs as a result.

As time goes on, however, it’s becoming increasingly clear that fuboTV is as close to being the “skinny,” pay-per-view, sports-minded cable package that people want in the TV industry. what television can really offer right now. The fact that the company came out of nowhere to become competitive with giants like Walt Disney and technology the giant Alphabet says so.

Bottom line? FuboTV certainly wouldn’t be a bad bet as a small part of a risk-tolerant growth investor’s portfolio.