FuboTV's Shifting Priorities Create Focus On Path To Profitability, Says Analyst

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  • Barrington Research analyst James Goss has reiterated the Market Perform rating on the shares of FuboTV Inc FUBO
  • The analyst senses somewhat of a shift in the ranking of objectives for management as it assesses the landscape and evaluates which priorities would best support the achievement of its valuation objectives.
  • Goss said the stock has been under pressure, and valuation measures are significantly constrained when applied to the stocks of companies for which earnings are nonexistent and lack a clear path to profitability.
  • FuboTV reported a 43% increase in its Q3 revenue aided by growth in North America.
  • There is significant seasonality in the business tied to the sports schedule, creating stronger growth trends in the second half of the year with the return of football, he added.
  • The analyst said the sports season should support Q4 subscriptions that are expected to improve to 1.365 million at the midpoint, an increase of 25,000 from the prior guidance level.
  • Full-year 2022 revenues for the U.S. segment are expected to increase to $952 million due to stronger subscriber trends than originally expected.
  • Goss cited that the Ad ARPU improved compared with Q2, with political advertising supporting ad levels.
  • The analyst remains supportive of the overall thesis on FuboTV, including aggressive subscriber acquisitions and expanding ARPU.
  • He thinks Fubotv’s further demonstration of progress toward achieving its ambition to be free cash flow positive by 2025 would be very encouraging.
  • Price Action: FUBO shares are trading lower by 1.11% at $3.55 on the last check Monday.
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