Fubo Shares Bleed As Analysts Re-rate Stock Post Q1 Results
By Anusuya Lahiri
Analysts remained concerned over fuboTV Inc (NYSE: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.