Live TV streaming platform fuboTV (NYSE:FUBO) has been one of the market’s most polarizing battleground stocks over the past few months. On one side, you have FUBO stock bulls, who believe fuboTV is building this next-gen interactive betting and streaming platform for live sports.
On the other side, you have the FUBO stock short-sellers, who believe that fuboTV is just another commoditized streaming platform that is burning money on acquiring content with no real competitive advantage.
Both arguments have some merit.
But, over the past week, the scales have tilted in favor of the bull thesis, as fuboTV has taken some major steps to execute strongly on turning into a differentiated streaming platform with a compelling value prop.
I believe fuboTV will continue to execute strongly over the next few months. As the company does, the bear thesis will drown out, and the bull thesis will come to life. fuboTV’s subscriber, revenue, and profit numbers will soar. So will FUBO stock.
The investment implication?
It’s time to buy — and hold — fuboTV stock for the long haul.
Here’s a deeper look.
FUBO Stock: The Long-Term Bull Thesis
The long-term bull thesis on FUBO stock is pretty simple, and it boils down to this: fuboTV is in the first inning of building a next-generation streaming platform where sports fans can interactively bet on micro-events in sporting games on a real-time basis.
Fast forward to 2025. You and you friend are sitting on your couch, watching the Golden State Warriors basketball game through fuboTV on your smart TV. Stephen Curry gets fouled and goes to the free throw line. You and your friend take out your phones and open up the fuboTV app. You each place a $5 bet on the app that Curry will make the free throw. He does. You both win $5. And you two go back to watching the game until the next “bettable” moment, at which point you pull out the fuboTV app again and place a micro-bet.
That’s the future.
It may not be fuboTV that builds that future. But someone will build that future. And the bull thesis on FUBO stock is that fuboTV will be the company that does build that future, because they are the first-mover in this space.
But… a first-mover advantage is only good if the company executes on the opportunity.
And that’s exactly what fuboTV management is starting to do: Execute on this huge opportunity of building an interactive sports-betting-and-streaming platform.
It Starts With Content
The first step in building an all-in-one interactive sports betting-and-streaming platform is acquiring the rights to all sorts of sports content, preferably exclusive rights to develop a content moat. The second step is creating a digital sportsbook that integrates with that sports content.
FuboTV is presently doing both — and that’s great news for FUBO stock.
Over the past two weeks, fuboTV has signed a deal with Marquee Sports Network to bring non-national Chicago Cubs baseball games to its streaming platform, and acquired the exclusive streaming rights to the Qatar World Cup 2022 qualifying matches. These two deals represent a strong continuation of fuboTV’s ability to build out an exclusive content moat with unique sporting events, including local sports and hard-to-watch international sports.
Long-term, we suspect that fuboTV will be able to leverage its sports-first focus and scale to be able to win content partnerships with most local sports networks — like Spectrum Sportsnet for Los Angeles Lakers games — as well as most international sports organizations. Some, if not all, of these content partnerships will be exclusive, meaning that at scale, we see fuboTV as being the exclusive streaming home for everything-you-can watch sports.
This will, of course, make fuboTV a compelling streaming platform option for sports fans.
It Continues With the Betting
At the same time, fuboTV is aggressively acquiring the assets and rights necessary to launch a full-fledged digital sportsbook in 2021.
The company recently acquired sports betting and interactive gaming company, Vigtory. FuboTV expects to leverage the underlying betting technology at Vigtory to create a seamless betting experience for the fubo Sportsbook.
The company has also secured market access agreements for the fubo Sportsbook in Iowa, Indiana, and New Jersey, and both the NBA and MLB have made fuboTV an “authorized gaming operator” of their leagues.
In other words, fuboTV is doing everything it needs to be doing today to successfully launch an integrated digital sportsbooks in 2021, and subsequently scale that sportsbook in 2022-plus.
Again, this is great news for FUBO stock.
Huge Upside Potential for fuboTV Stock
If fuboTV successfully executes on its vision, the potential upside in FUBO stock is enormous.
Here are the numbers.
There are tens of millions of diehard sports fan in America. Against that backdrop, if fuboTV does become an integrated sports-betting-and-streaming platform with exclusive content rights, it will easily attract 10 million paid subscribers by 2030. Average revenue per subscriber per month should exceed $70, driven by a mix of subscription fees, ad revenues and betting commissions. That implies north of $8.4 billion in 2030 revenues for fuboTV.
I see EBITDA margins running toward 20%, as ad revenue and sports betting revenue add higher-margin revenue firepower into the business model and boost margins.
Assuming so, my modeling suggests fuboTV is on track to do about $10 in earnings per share by 2030. Based on a 20X multiple, that implies a long-term price target for FUBO stock of $200.
Bottom Line on FUBO Stock
FuboTV has an uphill battle ahead of it. Building a dominant sports-betting-and-streaming platform will be hard. But if the company pulls it off — and I suspect they can, given recent developments — the potential upside in FUBO stock is enormous.
This is a good name to own as a speculative long-term investment.
But it’s not the best speculative long-term investment opportunity in the market today.
You see, the world is rapidly changing. Technology is changing everything about everything. Folks aligning their portfolios with this trend are positioning themselves to score huge returns during the Roaring Twenties. Folks sleeping on this seismic shift will get left behind.
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Source: Investor Place