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Online streaming and gambling stocks have been more difficult to trade lately. Investors are now turning to dividend stocks and retirement stocks for a volatility-free market. Though fuboTV is one app, you should pay attention to. It’s moving in the right direction, and with its many features, FuboTV (NYSE:FUBO) is a viable long-term stock.
Many exciting innovations are happening in the media industry, and one of the most disruptive is FuboTV. This live TV streaming service gives you sports-first streaming services such as NFL, MLB, NBA, and more, while they have been a disruptor in their industry with their innovative approach to the market.
However, issues with Netflix (NASDAQ:NFLX) are happening to affect overall sentiment. The biggest streaming company lost 200k subscribers in the first quarter, which resulted in much frustration for some of its competitors. The industry is struggling to rebound from it, but many companies are trying to adjust their operations and spend less money.
But that does not mean investors should completely wash their hands of the streaming space. FuboTV, in particular, is, providing several reasons for investors to remain interested.
- CEO David Gandler and CFO John Janedis know how to get the most bang for their buck when investing. They loaded up on FuboTV shares on recent stock weakness.
- FuboTV had some impressive growth numbers recently. Revenue doubled, and subscriber count got close to doubling as well.
- Consumers are switching to cable-free streaming services like fuboTV because of the new entertainment options and cheaper subscription costs. It is a secular tailwind that the company is benefitting from.
FUBO Stock Is a Buy on Weakness
fuboTV is a digital streaming service expanding its subscriber count and revenue. The company has a positive outlook on the future, reflected in its ambitious growth strategy.
Management is committed to maintaining a high growth rate. However, investors are waiting to see bigger and better numbers. Since the company has not been able to deliver what they want, they’re looking elsewhere for its next investment.
FuboTV does rely on advertising to generate revenue and make a profit, but it has a price point that is too low to cover the costs necessary for growth. Over time, their offering of amazingly low prices would not be sustainable. They will either need to cut costs or increase their subscription price to generate strong returns.
FuboTV has to pay a lot of content costs and get a percentage of user subscriptions. They estimate this expense at 102% of revenue in Q1. Management understands that if it wants to regain investors’ trust, it will need to start delivering on the bottom line.
The management finally acknowledged what investors have been concerned about for several quarters and will focus on improving profitability as per a shareholder letter dated May 5.
On the publication date, Faizan Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.