FuboTV’s Struggles in Competitive Streaming Market FUBO shares have dropped 45.6% year to date (YTD), significantly lagging behind the Zacks Consumer Discretionary sector’s rise of 15% and the Zacks Broadcast Radio & Television industry’s impressive return of 55.3%.
FUBO’s challenges stem from stiff competition, ongoing legal issues, and pressures in the virtual multi-channel video programming distributor (MVPD) market.
Fourth Quarter 2024 Earnings Estimates Show Promise
For the fourth quarter of 2024, FUBO anticipates revenues in North America to fall between $426 million and $446 million. This range indicates a potential year-over-year growth of 9% at the midpoint. Additionally, revenues from international markets are expected to be between $8 million and $9 million, signaling flat growth compared to last year.
Looking ahead to the full year 2024, FUBO projects revenues from North America to range from $1.58 billion to $1.6 billion, reflecting a 19% increase year-over-year at the midpoint. Revenues from other global markets are estimated to be between $33 million and $35 million, indicating a 4% year-over-year rise at the midpoint.
The Zacks Consensus Estimate for FUBO’s fourth-quarter revenues is currently set at $446.66 million, which translates to an 8.89% growth compared to the previous year. The consensus estimate for the fourth-quarter loss stands at 12 cents per share, showing a year-over-year improvement of 29.41% and remaining unchanged over the past month.
For 2024, the Zacks Consensus Estimate for FUBO’s revenues is $1.63 billion, which indicates an 18.86% year-over-year growth. The consensus suggests a loss of 37 cents per share, consistent over the last 90 days, with a year-over-year improvement of 49.32%.
FUBO has consistently exceeded the Zacks Consensus Estimate in each of the last four quarters, with an average surprise of 36.89%.
fuboTV Inc. Price and Consensus
fuboTV Inc. price-consensus-chart | fuboTV Inc. Quote
Check the latest EPS estimates and surprises on Zacks Earnings Calendar.
Streaming Shift Provides FUBO with New Opportunities
FUBO is gaining from the trend toward streaming, as traditional pay-TV subscriptions have plummeted from 105 million in 2010 to 50 million in 2024. Notably, around 30% of those who abandoned traditional pay-TV have opted for virtual MVPDs in the last year, demonstrating a strong demand for FUBO’s services.
The company offers various subscription models, including a Free Tier, standalone plans, and a sports-focused virtual MVPD. This versatility caters to a wide range of consumer preferences and budgets. FUBO also enhances the interactive experience with features like live stream polls and trivia games, which appeal to advertisers seeking engagement.
Despite these strengths, FUBO faces hurdles such as a preliminary injunction against its sports streaming partnership with Disney DIS, Fox FOXA, and Warner Bros. Discovery WBD. This injunction may bolster FUBO’s position, but an appeal from these companies looms large, increasing legal uncertainties for FUBO moving forward. The antitrust case is expected to go to trial in 2025, prolonging the company’s challenges.
Additionally, competition from well-resourced rivals like Peacock, ESPN+, and Paramount+ adds to the pressure. The success of the virtual MVPD model is crucial for offsetting the decline in traditional pay-TV subscriptions, underscoring FUBO’s need to maintain its competitive advantages.
Investor Outlook on FUBO Stock
FUBO is positioned to benefit from the shift to streaming and its innovative offerings, although it must contend with intense market competition and ongoing legal issues.
Carrying a Zacks Rank #3 (Hold), it may be prudent for investors to wait for a more opportune moment to buy FUBO stock. For those interested, you can view today’s Zacks #1 Rank (Strong Buy) stocks here.
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The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Nasdaq, Inc.
