Shares in FuboTV have rebounded strongly after the streaming pay-TV bundle operator released preliminary fourth-quarter results showing more subscriber growth and better-than-expected revenue.
The stock rose more than 16% past $28 in early trading, on twice the normal level of volume, erasing some of its recent losses.
Total revenue in the quarter is expected to come in at $94 million and $98 million, the company said, which would be a 77% to 84% gain from the same period in 2019. The company had previously estimated it would reach $80 million to $85 million. (Fubo merged with FaceBank Group in 2020, making the comparisons with the prior-year quarter inexact.)
Fubo expects to have 545,000 subscribers by the end of the year, up 72% over its year-ago tally and ahead of its prior forecasts for 500,000 to 510,000.
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Final fourth-quarter numbers will be reported in the next few weeks.
The five-year-old startup has seen its stock become the subject of fierce debate among traders and on Wall Street in recent days. After an IPO at $10 a share in October, it surged to $62 in late December before cratering in recent sessions on waves of bearish sentiment that it was overvalued. Bulls see it as a tech breakout along the lines of Roku or even Netflix.
In a research note reaffirming her “buy” rating on shares, Needham & Co.’s Laura Martin called the stock “an inexpensive way for public investors to participate in the U.S. consumer shift toward OTT and streaming TV.” Rich Greenfield at LightShed Partners was among those countering that upbeat view, slapping an $8 price target on the stock and calling it a “most compelling short” due to valuation and what he considers fatal flaws in the business model of services once called “skinny bundles.”
A lockup of shares from the IPO that expired at the end of December also played havoc with the stock price, enabling some investors to lock in profits and unload shares.
In the internet TV bundle space, Fubo trails Hulu + Live TV, YouTube TV and Sling, which have between 2.5 million and 4.1 million subscribers apiece.
The preliminary fourth-quarter results “exceeded what was already expected to be a record year for the company, and demonstrate continued consumer excitement for the company’s live TV streaming offering,” co-founder and CEO David Gandler said in a press release. “In 2021, we will continue to be laser focused on executing our growth strategies, which include continuing to grow advertising revenues, working to implement sports wagering into our product and further establishing FuboTV as a leader in sports and live streaming.”
