Fubo Shares Bleed As Analysts Re-rate Stock Post Q1 Results

  • Analysts remained concerned over fuboTV Inc FUBO, as reflected by their re-rating post Q1 results.
  • Needham analyst Laura Martin maintained FuboTV with a Buy and lowered the price target from $15 to $5 (49% upside).
  • Gross margins of negative (2)% were the lowest FUBO had reported since 2Q20 when it only had 286,000 paid subscribers. 
  • The margin pressure came from new soccer content, standard price escalators on Jan 1, and FUBO's price increase didn't occur until 2Q22. 
  • Martin still believes that content deals will be renewed at lower prices per sub now that FUBO has over 1 million paid subscribers.
  • Martin expects margin expansion to take longer than anticipated since FUBO's content deals were typically three years long.
  • Roth Capital analyst Darren Aftahi downgraded FuboTV to Neutral from Buy with a price target of $4.25, down from $7.50 (26.7% upside). 
  • The cost of the company's subscriber base is yet to be offset by better advertising. 
  • FuboTV's advertising revenue came in 19% lower. While some of those headwinds were macro-related and a delay in its new ad tech stack, it marked the second quarter of ad average revenue per user compression. 
  • JPMorgan analyst Philip Cusick also downgraded FuboTV to Underweight from Neutral without a price target.
  • Price Action: FUBO shares traded lower by 17.6% at $3.40 on the last check Friday.
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