FuboTV, the sports-first TV-streaming company, is facing a high-profile battle against a joint venture from rivals Walt Disney Co., Fox Corp., and Warner Bros. Discovery Inc. However, analysts at Wedbush believe that FuboTV has significant growth potential and could offer substantial upside if it can compete against skinny bundles.
Earlier this year, FuboTV filed a lawsuit to block the new sports-streaming joint venture from Disney’s ESPN, Fox, and Warner Bros. Discovery. The company’s CEO, David Gandler, criticized the rivals’ “pernicious practices” and expressed the desire to compete fairly and offer consumers a streaming option that gives them the channels they want at a fair price.
Despite the attention focused on the lawsuit, Wedbush is encouraged by FuboTV’s renewed focus on improving its ad sales, increasing ad inventory, optimizing per-subscriber metrics, reducing cash burn, and inching towards profitability. The analyst believes that FuboTV can still reach profitability by 2025, even with more modest subscriber growth expectations due to the proposed Disney-Fox-Warner Bros. Discovery sports bundle.
Wedbush reiterated its outperform rating and $5 price target for FuboTV. Another research firm, Seaport Research Partners, upgraded FuboTV to a buy rating with a $2.50 price target, citing an attractive risk-reward profile for investors.
FuboTV currently has a market cap of $597.32 million. Analysts’ ratings for the company are divided, with four buy ratings, four sell ratings, and one hold rating. The stock has experienced a decline of 44.9% in the last three months but showed a small increase of 2.6% in premarket trades on Monday.
Overall, while FuboTV faces challenges in its battle against established rivals, analysts believe that the company has the potential for significant growth. With its focus on improving key metrics and reducing expenses, FuboTV aims to achieve profitability by 2025. Investors who can navigate the small-cap market and be nimble in their trading may find the risk-reward profile of FuboTV shares attractive.
