Even with a wave of profit-taking after the fact, fuboTV (NYSE:FUBO) stock is still on pace to end the week up almost 10% thanks to a major bullish response to Tuesday’s post-close release of last quarter’s results.
While traditional cable customers continue to cancel their expensive, bloated service, fuboTV continues to add many of those cord-cutters to its ranks. The company added 91,291 (net) subscribers to its streaming-cable customer base during its second quarter, bringing its headcount to 681,721. In addition to collecting monthly service fees from them, fuboTV also increased its advertising revenue to $16.5 million for the three-month stretch ending in June, up 281% year over year.
The initial response to the report was stellar. Already inching higher beforehand, buyers poured in on Wednesday morning, pushing the stock up as much as 17.6% that day, and higher by more than 28% for the week to date. With a chance to look back and think about the movement, though, investors appear to have decided that’s a little too much, too fast.
Long-term owners and watchers of fuboTV stock are certainly accustomed to such volatility, both good and bad; this week’s volatility turned from good to bad pretty quickly.
This is also a stock, however, that’s becoming less and less volatile the more the underlying company proves itself.
To this end, last quarter’s subscriber growth and 196% year-over-year revenue growth mark several consecutive quarters of forward progress for both measures, with more of the same in the cards. Analysts are collectively calling for full-year sales growth of 144%, followed by top-line growth of 64% next year. The company’s deeper move into sports wagering — like the acquisition of sportsbook Vigtory — should only help bolster the sports-minded service’s marketability. Technology market research outfit Technavio estimates the sports betting market itself will grow at an annual pace of 10% between 2020 and 2024, growing by $134 billion during this four-year span.
Given the undertow, fuboTV is a name that merits consideration for more speculative investors. Just know it’s apt to remain at least a somewhat volatile ticker regardless of this growth and increasing clarity. Plan accordingly.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.
View more information: https://www.fool.com/investing/2021/08/13/why-fubotv-is-up-nearly-10-this-week/