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FuboTV is an American streaming service that focuses primarily in the sports sector, streaming the likes of NFL, NBA, MLS, as well as international soccer. They launched in 2015 focusing just on the soccer demand, but later in 2017 started to stream all sports. It released its IPO in October 2020, at $10.20 per share.

The share price has been on a rollercoaster, running over 100% in 4 days to a price of $62.29 in December 2020, only to be back under $25 two weeks later. The stock now sits at $26 per share, and earnings are due on 10th August. What can be expected?

Earnings

In the three previous quarters, revenue has beaten analyst estimates, 12.9% for Q3 2020, 8.9% for Q4 2020 and 15.3% for Q1 2021. Wall Street expects revenue to be $121M for Q2 2021, an increase of $44M from the same quarter last year. But bottom line numbers have been the let down so far for Fubo. Q1 2021 showed a net loss of $70.2M, a net loss margin of -58.6%. The company is still in early stages, and profitability is sure to come later on as we’ve seen with other streaming services. But based on previous earnings and the ever-increasing demand for streaming services, earnings could beat expectations again this quarter.

A thriving sector

Fubo is a high growth company and is set to thrive in sector that is also seeing great momentum. Streaming services such as Netflix (NASDAQ:NFLX) are household names. Recently launched was Disney’s (NYSE:DIS) Disney+ service, now boasting over 100 million subscribers since its release in November 2019. Both of these companies are clear examples of the demand for streaming.

Fubo announced that they would be launching a sports-betting division in the fourth quarter of 2021. This service will go live within their streaming app, and will add another revenue stream for the company. Sports-betting is a highly competitive sector, with big names like DraftKings (NASDAQ:DKNG) being the main competition for the company.

The companies forecast for subscribers is set to see 840,000 subscribers by the end of the year, up more than 50% compared to 2020 numbers. A summer filled with sporting events such as the Olympics and the Euros will also help Fubo to see this number achieved.

Conclusion

I like Fubo stock for a long term investment. I think Roku (NASDAQ:ROKU), but early days. There will be ups and downs along the way, but the thriving sector and great growth seen already by the company are a good sign. Earnings that are due on Tuesday 10th August may provide a buying opportunity if the report is lower than the estimates. Short interest is at 22%, and there are several catalysts to look forward to into the close of the year.

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