FUBO Shares Fall 46% YTD: How Should Investors Play the Stock?

Core Viewpoint - FuboTV (FUBO) has experienced a significant decline in share price, down 45.6% year-to-date, while the broader consumer discretionary sector and the broadcast radio & television industry have seen gains of 15% and 55.3%, respectively. This underperformance is attributed to intense competition, ongoing legal challenges, and pressures from the virtual MVPD market [1]. Revenue Estimates - For Q4 2024, FUBO anticipates North American revenues between $426 million and $446 million, reflecting a 9% year-over-year growth at the midpoint. Revenues from other regions are expected to be between $8 million and $9 million, indicating flat year-over-year growth [2]. - For the full year 2024, FUBO projects North American revenues of $1.58 billion to $1.6 billion, representing a 19% year-over-year growth at the midpoint. Revenues from the rest of the world are expected to be between $33 million and $35 million, indicating a 4% year-over-year growth at the midpoint [3]. Consensus Estimates - The Zacks Consensus Estimate for FUBO's Q4 revenues is $446.66 million, indicating an 8.89% year-over-year growth. The consensus for the fourth-quarter loss is pegged at 12 cents per share, unchanged over the past 30 days, indicating a year-over-year growth of 29.41% [4]. - The Zacks Consensus Estimate for FUBO's 2024 revenues is $1.63 billion, indicating year-over-year growth of 18.86%. The consensus for the 2024 loss is currently pegged at 37 cents per share, unchanged over the past 90 days, indicating a year-over-year growth of 49.32%. FUBO has beaten the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 36.89% [5]. Market Opportunities - FUBO is capitalizing on the shift to streaming, with traditional pay-TV subscribers decreasing from 105 million in 2010 to 50 million in 2024. Approximately 30% of customers who left traditional pay-TV have adopted virtual MVPDs in the last year, indicating strong demand for FUBO's services [7]. - FUBO offers various options, including a Free Tier, standalone subscriptions, and a sports-first virtual MVPD, catering to diverse consumer needs and price sensitivities. Interactive features like polls and trivia games in live streams enhance the ad experience, making FUBO's offerings more appealing to advertisers [8]. Competitive Landscape - A preliminary injunction against a sports streaming joint venture involving Disney, Fox, and Warner Bros. Discovery strengthens FUBO's competitive position and supports its antitrust claims. However, the appeal by these companies presents significant legal challenges for FUBO, with an ongoing antitrust case set for trial in 2025, prolonging uncertainty [9]. - FUBO faces stiff competition from major players like Peacock, ESPN+, and Paramount+, which have substantial resources, intensifying competition in the streaming market. The success of the virtual MVPD model is crucial for FUBO to offset the decline in traditional pay-TV, placing pressure on the company to maintain its competitive edge [10].