FuboTV Marches Closer Towards Streaming Profitability

FuboTV Inc (NYSE: FUBO) has carved out a niche among streaming services. It offers a live TV streaming service similar to cable TV with an extensive focus on live sports and interactive capabilities. The formula has caught on as it has grown its total subscribers to 1.45 million in North America and 399,000 in the rest of the world (ROW). The company recently won a preliminary injunction temporarily blocking the launch of competitor Venu Sports, which caused shares to surge nearly 30%.   

FuboTV operates in the consumer discretionary sector, competing with streaming services like The Walt Disney Co. (NYSE: DIS), Warner Bros. Discovery Inc. (NASDAQ: WBD), Fox Co. (NASDAQ: FOXA) and Comcast Inc. (NASDAQ: CMCSA).

What Does FuboTV Offer?

FuboTV offers over 350 live sports and TV channels, including all the major networks and local broadcast channels, with unlimited digital video recording (DVR) capabilities minus the set-top boxes and cable. The service is 100% streaming and paid on a month-to-month recurring subscription plan. The plans range from the Pro plan at $79.99 a month for 192 channels up to 10 screens to the Deluxe Plan at $109.99 for 306 channels, 4K included up to 10 screens, and Sports Plus with NFL Redzone, MGM+, and International Sports Plus. To their credit, FuboTV lets potential customers compare its offerings with competitors like cable TV, Philo, Sling TV, DirectTV Stream, Hulu + Live TV, and Alphabet Inc. (NASDAQ: GOOGL)-owned YouTube TV.

Venu Sports: A Live Sports Juggernaut That Would Undercut FuboTV by 46%

Venu Sports is a joint venture backed by entertainment and sports giants Warner Bros. Discovery, Fox, and Disney. FuboTV claimed that the triple behemoth combination would pose anticompetitive risks as they conspire to drive out competitors in the live sports segment. FuboTV argues that the three companies in the joint venture control 60% to 85% of all sports content in their markets. The most concerning factor is the $42.99 price point for Venu Sports, which would undercut FuboTV’s $79.99 Pro plan by 46%. A New York District Court judge agreed on this and granted a temporary injunction suspending the launch of Venu Sports just ahead of the start of NFL football season.

Judge Temporarily Blocks the Venu Sports Launch 

Judge Margaret Garnett ruled that the joint venture would substantially lessen competition and restrain trade in the relevant market, which would be a direct violation of Section 7 of the Clayton Act. Venu Sports would provide unparalleled sporting events stemming from the TV rights already secured by the three media giants, which include NFL, NBA, MLB, NHL, soccer, golf, tennis, NASCAR, and the UFC, at a starting price of $42.99 a month. The temporary injunction will last until the case goes to trial in 2025. Venu Sports plans to appeal the decision to remove the injunction before the trial.

FUBO Stock Tries to Complete a Cup Pattern and Gap Fill

The daily candlestick chart for Fubo surged over 50% in the two days following the Venu Sports injunction news. If Fubo can continue its trajectory towards the cup lip line at $2.44, it will have completed the cup pattern and gap fill. The daily relative strength index (RSI) spiked up to the 78-band. Pullback support levels are at $1.66, $1.47, $1.22, and $1.12.

Fubo's Fundamentals Are Improving

FuboTV reported a Q2 2024 EPS loss of 4 cents, beating consensus estimates for 14 cents by 10 cents. Revenues rose 26% YoY to $382.7 million, beating $368.32 million consensus estimates. Ad sales rose 14% YoY. The net loss from continuing operations was $25.8 million, a favorable improvement from the loss of $54.2 million in the previous year.

North American paid subscribers rose 24% YoY to 1.45 million. International subscribers rose 1% YoY to 399,000. The monthly average revenue per user (ARPU) rose 5% to $85.49 from $81.62 in North America and 2% to $7.02, up from $6.91 internationally.

FuboTV Issues In-Line Guidance

The company expects Q3 2024 revenues of $360 million to $370 million, versus $364.63 million consensus estimates. Full-year 2024 revenues are expected to be between $1.57 billion and $1.59 billion, versus the consensus estimates of $1.57 billion.

FuboTV CEO and Co-Founder David Gandler commented, “In North America, we exceeded guidance, growing North America revenue by 26% and subscribers by 24% year-over-year. We're confident we can continue this success as we remain focused on delighting our users with more flexible bundle options as part of our Super Aggregation strategy, delivered to them through a single, frictionless app. We also continue to advocate for a fairer playing field in the media industry, benefiting Fubo, our competitors and, most importantly, the American consumer.”

FuboTV analyst ratings and price targets are at MarketBeat. There are seven Wall Street analyst ratings on Fubo stock, comprised of three Buys and four Holds. Consensus analyst price targets point to a 39.13% upside at $2.88.

The article "FuboTV Marches Closer Towards Streaming Profitability " first appeared on MarketBeat.