stock offers “a compelling entry point,” with potential positive catalysts in the near term that could help the shares, said an analyst at Wedbush.
(ticker: FUBO), a live streaming company that focuses heavily on sports broadcasts, have struggled this year, falling 75% in 2022. The stock has dropped 85% in the last 12 months. In August, Wedbush analyst Michael Pachter downgraded shares to Neutral from Outperform, citing “slowing subscriber growth, fierce competition, inflation, and rising content costs.”
But on Friday, that same analyst upgraded the stock to Outperform again and maintained his $6 price target. He wrote in a research note that the current share price of around $4 is an attractive entry point for investors.
“FuboTV has a solid head start in offering live sports programming to its subscribers, has a thriving and growing advertising business, and presents a compelling opportunity for a sports wagering company to partner with an established sports television broadcaster,” Pachter wrote.
The analyst added that the issues he raised previously, such as slowing subscriber growth, competition, inflation, and rising content costs, still present near-term headwinds. However, “our concerns are assuaged to an extent by fourth-quarter catalysts including the new upfront cycle hitting (we think FuboTV had a more successful upfront year-over-year) and expected original content around the upcoming World Cup which unusually plays in November and December.”
He also said that the company has the opportunity to reach profitability by 2025.
Shares of FuboTV jumped 3.3% in premarket trading Friday to $4.05.
futures were falling 1.2%.
Advertising and inflation have been major discussion points surrounding streaming stocks recently, as giants like Netflix (NFLX) and Walt Disney’s (DIS) Disney+ gear up to release ad-supported tiers on their platforms. Barron’s described what this means for streaming stocks in a recent cover story.
Write to Angela Palumbo at [email protected]