FuboTV's Subscription And Ad Revenue Soar, But Analyst Cautious Amid Decelerating Q4 Growth

Stephens analyst Nicholas Zangler remained Equal-Weight on FuboTV Inc FUBO with a price target of $3.

FUBO outperformed across both segments, namely subscription and advertising. The 4Q23 Y/Y advertising growth will likely decelerate as 4Q23 laps last year's benefit of midterm elections and the World Cup. The analyst guided 4Q23 NA subscriber count to 1.592 million at the midpoint vs. Zangler's prior estimate of 1.575 million, with 4Q23 total revenue to $395.6 million at the midpoint vs. consensus of $378.5 million. Although the 3Q23 subscriber count beat Zangler's estimate (1.477 million vs. 1.337 million), FUBO did not see meaningful subscriber growth directly attributable to September's Charter Communications, Inc CHTR and Walt Disney Company DIS dispute. 

Related: Charter CFO Hails Disney Renewal as Triumph for Pay-TV Industry

Instead, Zangler notes that ongoing cord-cutting and the fall sports calendar were the primary contributors. 

Zangler increased his FY23 revenue estimate to $1.354 billion, up from a prior estimate of $1.301 billion, reflecting the 3Q23 subscriber beat and associated strength in subscription and advertising revenues. The analyst boosted gross profit to $69.9 million from a prior estimate of $59.2 million. The analyst also lifted his adjusted EBITDA estimate from ($231.2 million) to ($220.6 million) reflecting the upside in 3Q23 performance. Zangler's FY24 revenue estimate increases to $1.626 billion vs. a prior estimate of $1.596 billion, reflecting higher subscription dollars. The analyst modeled a gross profit of $180.2 million. Zangler reduced his adjusted EBITDA estimate to ($148.9 million) from ($140.7 million), incorporating incremental tech and development costs. 

Price Action: FUBO shares traded lower by 0.33% at $2.99 on the last check Monday.