This leading media company introduces sports betting, high growth is just around the corner

by Stock Markets July. 16,2023
This leading media company introduces sports betting, high growth is just around the corner

So far this year, investors who own sports streaming platform Fubotv Inc (NYSE:FUBO) have experienced a turbulent year. Although the company's share price has risen by about 4% this year, it has since reached an all-time high of $62.29 in December 2020. , The company’s share price has fallen by more than 53%, and its current market value is $4.1 billion.

FuboTV, headquartered in New York, was launched in 2015 and is mainly used to broadcast live football matches (non-American football). The company went public in October 2020.


Users of the platform can watch live sports events, entertainment and news content. The company's advertising business has also been growing. In addition, Wall Street expects the company to launch a sports book application that combines streaming services with online games and gambling.


On August 10, the company announced a strong second-quarter performance report. Total revenue increased by 196% year-on-year to US$130.9 million. The two main parts of income are:


Advertising revenue was $16.5 million, a year-on-year increase of 281%;

Subscription revenue was 114.4 million U.S. dollars, an increase of 189%.

In addition, the average monthly revenue per user increased by 30% to $71.43. To the delight of investors, FuboTV added 91,291 net users in the last quarter.


CEO David said: "FuboTV performed strongly in all key financial and operational indicators (subscribers, total revenue and advertising revenue) in the second quarter of 2021."


Management expects FuboTV's annual revenue to be US$565 million, a year-on-year increase of 116%.


FUBO stock price forecast

Seven analysts surveyed by gave FuboTV a stock rating of "outperform." The stock's 12-month target price of $43.86 means a return rate of about 50% compared to current levels.

The stock's price-to-sales ratio and price-to-book ratio are 9.91 times and 6.65 times, respectively. In contrast, streaming media giant Netflix's P/E ratio and P/E ratio are 9.13 times and 18.17 times, respectively.


The technical icon shows that the stock price is likely to move up to the $31 to $35 level. In this case, the resistance level of 34-35 USD may be touched, and then it may trade sideways between 30-35 USD.


We should also note that the beta value of FUBO stock is 2.93. Beta is a measure of the volatility of securities relative to the overall market.


A company with a Beta greater than 1, means that it is more unstable than the market. If the beta is 2.93, the stock's volatility may be about three times that of the overall market. In other words, FUBO stock price is expected to fluctuate, especially in the short term.


Although we expect the stock price to rise in the next few weeks, it is unlikely that it will rise in a straight line. Before the new price increase begins, the stock price may even fall further to $28. Once the stock price drops, it will be a good opportunity to buy.


4 trading methods

1. Buy FUBO stocks at current levels


Investors who do not care about the daily fluctuations of the stock price and believe in the company's long-term potential can now consider buying FuboTV shares.


FUBO shares closed at 29.56 US dollars yesterday. Investors who buy and hold should maintain this long position for a few months, during which time the stock may try to challenge $35 and then $40, resulting in a return of about 35%.


However, investors who are worried about a sharp drop can also consider setting a stop loss point about 3-5% below the market entry point. We should also note that it may take several quarters before the stock price reaches $62.29.


2. Sell FUBO's cash-backed put options


Our second transaction involves a cash-backed bearish strategy. We have mentioned this option in many articles recently.


Stock traders calling on FuboTV can now sell put options that were exercised at $28 on November 19, which is currently quoted at $3.58.


As long as FUBO stock closes above $28 when the option expires, the premium will remain at $358. $358 will be the maximum return of the transaction (excluding transaction costs and taxes).


If FuboTV's stock is below $28.00 before maturity, then it will face downside risks. If this happens, traders can allocate 100 shares for each put option sold at a price of $28.00 per share.


When the stock price is US$24.42 (that is, US$28-3.58), the transaction will achieve a breakeven.


3. Purchase an ETF holding FuboTV


Many readers know that we often recommend ETFs that may be suitable to buy and hold. Therefore, investors who do not want to directly buy FuboTV stock but still want to invest in the company can consider buying a fund that holds the company's stock.


However, because FuboTV is a young and small company, it is not yet the main shareholder of the ETF. This means that ETFs can only provide limited exposure to FuboTV stocks.


ETFs holding FuboTV stock include:


The new fund, Roundhill Streaming Services & Technology ETF (NYSE:SUBZ), has remained flat since its establishment in February 2021. The weight of FUBO is 3.60%;

SPDR® S&P Internet ETF (NYSE:XWEB) The fund has risen 9.1% so far this year, and FUBO stock weight is 1.89%;

iShares Virtual Work and Life Multisector ETF (NYSE: IWFH) The fund has fallen 6.3% this year, and FUBO shares have a weight of 0.88%.

4. Buy stocks in another streaming company


Potential investors interested in streaming media may consider investing in other more well-known companies in the field.


The epidemic has caused many companies' subscriptions to streaming media services to reach a record high. However, as the economy opened up, some of these stocks were under pressure, so their stock prices have fallen below their 52-week highs.




Apple (NASDAQ:AAPL) is up 16.5% so far this year;


AT&T (NYSE:T) has fallen 5.2% so far this year;


Comcast Corporation (NASDAQ: CMCSA) rose 16.6% year-to-date;


Curiositystream Inc. (NASDAQ: CURI) fell 9.9% year-to-date;


Netflix (NASDAQ:NFLX) rose 5.2% year-to-date;


Roku Inc (NASDAQ:ROKU) rose 12.1% at the beginning of the year;


Sirius XM Holdings Inc (NASDAQ:SIRI) fell 0.87% year-to-date;


Spotify Technology SA (NYSE:SPOT) fell 24.8% year-to-date;


ViacomCBS Inc (NASDAQ: VIAC) rose 11.2% year-to-date;


The Walt Disney Company (NYSE:DIS) rose 1.3% year-to-date.


However, the fortunes of these companies have changed significantly in 2021. Therefore, potential investors need to conduct sufficient research on these stocks before buying.