FuboTV recently released robust Q2 stats
Investors are excited about the upcoming launch of the Fubo Sportsbook app
We are bullish on FUBO stock, which could rise to $35 in the coming weeks
Investors in the sports-focused streaming platform FuboTv (NYSE:) have had a mixed year so far. Year-to-date, FUBO stock is up about 4%. However, the stock has lost more than 53% since December 2020, when it hit a record high of $62.29. FuboTV's market cap stands at $4.1 billion.
New York-based FuboTV was launched in 2015 to primarily stream football games (football for non-US readers). It went public in October 2020.
Subscribers to the platform can access live sporting events as well as entertainment and news content. The company's advertising segment has also grown. In addition, Wall Street expects the company to launch its sportsbook app, which would combine streaming services with online gaming and betting.
The company announced robust on August 10. Total revenue increased 196% year-over-year to $130.9 million. Management reports revenue in two main segments: Advertising – revenue of $16.5 million, up 281% year-over-year;
Subscription – Revenue of $114.4 million, up 189%.
In addition, the monthly average revenue per user (ARPU) increased by 30% to $71.43. Investors were pleased that FuboTV added 91,291 net subscribers in the previous quarter.
About the results, CEO David Gandler said:
"FuboTV delivered a strong second quarter of 2021 for all of our key financial and operating metrics: subscribers, total revenue and ad revenue."
Finally, management has increased guidance. For the full year, FuboTV now expects to generate $565 million in revenue, an increase of 116% year-over-year. the stock has an 'outperform' rating. The stock has a 12-month price target of $43.86, which represents a return of approximately 50% from current levels.
Chart: Investing.com
The stock's P/S and P/B ratios stand at 9.91x and 6.65x, respectively. In comparison, the streaming giant's P/S and P/B ratios Netflix (NASDAQ:) are 9.13x and 18.17x.
Investors viewing technical charts may be interested in knowing that a rise towards the $31 to $35 level is likely. In that case, the FUBO stock could potentially reach resistance between $34-$35, after which it could trade sideways between $30 and $35.
We should also note that the beta (?) of FUBO stock is 2.93. Beta is a measure of the volatility of a security in relation to the overall market.
A company whose ? is greater than 1, means it is more volatile than the market. With a beta of 2.93, the stock is likely to be about three times more volatile than the overall market. In other words, expect fluctuations in the FUBO share price, especially in the short term.
While our expectation is that the stock price will rise in the coming weeks, it is not likely to be an immediate rise. There could even be a further drop towards $28 before a new upleg starts. In the event of such a decline, potential FuboTV investors would then find better value in the stock. Buy FUBO Shares at Current Levels
Investors who are not concerned with daily price movements and who believe in the company's long-term potential should consider investing in FuboTV stocks now.
FUBO stock closed at $29.56 yesterday. Buy-and-hold investors should expect to hold this long position for several months as the stock may try, moving towards $35 first and then $40, leading to returns of about 35%.
However, investors concerned about large declines may also want to consider placing a stop-loss that is about 3-5% below their entry point. We should also keep in mind that it may take several quarters for the stock to reach the previous ATH of $62.29.
2. Sell ??a cash put option on FUBO stock
Our second transaction is a cash backed put strategy. We've covered this option in numerous articles recently. Here is an example.
Bullish FuboTV stock traders could now sell a 28-strike put option on Nov. 19, currently listed for $3.58.
Assuming traders would enter this sell strategy at the current price, the advantage is that this $358 premium is maintained as long as FUBO shares close above $28, when the option expires. A total of $358 would be the maximum return on this trade (excluding trading fees and taxes).
The downside is that FuboTV stock trades below $28.00 before maturity. Should that happen, traders can be allocated 100 shares for each put sold at a cost of $28.00 per share.
At maturity, this trade would break even at a stock price of $24.42 (i.e. $28-$3.58).
3. Buy an ETF with FuboTV as a holding
Many readers are familiar with the fact that we regularly discuss exchange-traded funds (ETFs) that may be suitable for buy-and-hold investors. Readers who don't want to invest capital in FUBO stock but still want exposure to the stock may want to consider looking into a fund the company owns.
However, because FuboTV is a small, young company, it is not yet a lead holding in an ETF. This means that such an investment would provide only limited exposure to FuboTV shares.
However, examples of ETFs with FUBO stocks include:
Roundhill Streaming Services & Technology ETF (NYSE:): This new fund has been stable since its inception in February 2021. The weighting of the FUBO share is 3.60 %;
SPDR® S&P Internet ETF (NYSE:): Fund is up 9.1% YTD and FUBO stock weight is 1.89%;
iShares Virtual Work and Life Multisector ETF (NYSE:): The fund is down 6.3% YTD and the FUBO stock weight is 0.88%.
4. Buy shares in another streaming company
Potential investors interested in the streaming space, including audio and video entertainment, and looking to invest in FUBO stocks, should consider investing in other more established names in the industry.
The pandemic has pushed subscriptions to streaming services in many companies to record highs. However, as the economies open up, some of these stocks have come under pressure and so their stock prices are below their 52-week or even ATH highs.
Several names with streaming income that might appeal to readers are (in alphabetical order):
Apple (NASDAQ:): up 16.5% YTD;
AT&T (NYSE:): down 5.2% YTD;
Comcast (NASDAQ:): up 16.6% YTD;
Curiositystream (NASDAQ:): down 9.9% YTD;
Netflix (NASDAQ:): up 5.2% YTD;
Roku (NASDAQ:): up 12.1% YTD;
Sirius XM (NASDAQ:): down 0.87% YTD;
Spotify (NYSE:): down 24.8% YTD;
ViacomCBS (NASDAQ:): Up 11.2% YTD
Walt Disney (NYSE:): 1.3% higher.
As the above returns show, the fortunes of these companies varied considerably in 2021. Therefore, potential investors should research them carefully before investing capital in the stock.
Bottom Line
Since the IPO at the end of 2020, FUBO share has been in the spotlight. Although the record price of $62.29 still seems a long way off, the company is likely to create more shareholder value in the coming months. Rising subscribers and growth in the ad segment, as well as the upcoming sportsbook app, are likely to let FuboTV's stock down. In the meantime, the company could even find a takeover candidate.
