Why Barrington Research Is Bullish On FuboTV

Shares of streaming TV provider Fubotv Inc FUBO were rallying Thursday after the company scored a bullish analyst initiation on Wall Street.

The FuboTV Analyst: Barrington Research analyst James Goss initiated coverage of FuboTV with an Outperform rating and $40 price target.

Related Link: Netflix Is Now A Free Cash Flow Story: Analysts React To Q4 Earnings

The FuboTV Thesis: FuboTV priced its IPO at $10 per share back in October, but the stock has since soared as high as $62.29 before pulling back below $35.

In the initiation note, Goss said FuboTV is relatively small at this point, but it is a fast-growing competitor in the streaming video distribution space.

“As a growing number of content providers create proprietary programming packages that provide enhanced, yet complicated, sets of options for cord cutters and cord nevers, fuboTV offers a packaged collection of programming at subscription price levels that provide value relative to both roughly comparable packages from cable and satellite service providers, as well as in comparison with the aggregate cost of cobbling together a customized selection of services,” the analyst said. 

At this point, FuboTV has yet to turn a profit, but Goss said the company is on the path to long-term EBITDA and free cash flow breakeven points.

For now, the analyst said FuboTV’s path to profitability is a marathon rather than a sprint as the company prioritizes growing its subscriber base and maintaining value-oriented prices.

In the near-term, Barrington Research is projecting a 2021 EPS loss of $2.03, better than 2020's $7.60 loss.

FUBO Price Action: FuboTV shares were up 10.99% at $33.42 at last check Thursday.

Benzinga’s Take: The streaming media space is certainly a tremendous opportunity, but FuboTV will be up against some heavy hitters in both legacy media and streaming media companies.

The company reported just $61.2 million in revenue in the third quarter, suggesting it has a long way to go in taking a significant bite out of the competition.

Photo courtesy of FuboTV.