DISH: Better Buy: fuboTV vs. DISH

fuboTV Inc. (FUBO) and DISH Network Corporation (DISH) are two of the world’s fastest-growing television streaming service providers. FUBO operates a TV streaming platform for live sports events, news, and entertainment content. Offering pay-TV services under the DISH brand and the Sling brand, DISH operates through two segments — Pay-TV and Broadband, and Wireless.

Because people have been spending more time at home since the onset of the pandemic, their demand for television streaming services provided by both FUBO and DISH has increase significantly.

While FUBO has returned 267.2% over the past nine months, DISH has gained 50.7%. In terms of their performance over the past three-months, FUBO is a clear winner with 110.2% returns versus DISH’s 16%. But which of these two stocks is a better pick now? Let us find out.

Latest Movements

FUBO’s live TV streaming platform was launched on Hisense Smart TVs with the VIDAA Smart operating system on December 15. It is integrated with the Hisense remote control and comes with a ‘Sports’ button that takes consumers directly to FUBO’s Sports Network.

In December, the company added EPIX to its live TV streaming platform. It is a suite of premium entertainment networks featuring original programming and blockbuster movies.

The company acquired Balto Sports on December 1 representing its first move into the online sports wagering market. FUBO intends to leverage its own proprietary technology along with Balto’s contest automation software to launch a free-to-play gaming offering. In October, the company announced an agreement to stream AT&T Inc.’s (T) SportsNet’s coverage of over 225 live regular season games of the Pittsburgh Pirates and Pittsburgh Penguins, as well as other ancillary programming and behind the scenes content.

DISH announced on December 24, that it has reached a new, multi-year carriage agreement with Nexstar Media Group after Nexstar Media Group had forced the largest broadcast affiliate station blackout in TV history on December 2. DISH announced on December 8 that it has successfully integrated and validated end-to-end 5G connections using the industry’s first O-RAN compliant FDD radio, developed by Microelectronics Technology Inc. (MTI).

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The company announced on November 30 that it has signed agreements with four fiber vendors — Everstream, Segra, Uniti and Zayo — to connect its 5G network to sites covering approximately 60 million Americans. Alos that month, , DISH announced a long-term agreement with Crown Castle International Corp. (CCI) through which CCI will lease DISH space on up to 20,000 communication towers.

DISH announced its collaboration with QUALCOMM Incorporated (QCOM) on November 11 to test open and virtualized RAN 5G solutions containing QCOM’s 5G RAN Platforms to help fast track DISH’s rollout of the nation’s first cloud-native, Open RAN-compliant 5G network.

Recent Financial Results

FUBO’s revenue increased to $61.2 million for the third quarter ended September 30, 2020. Its paid subscribers increased 58% year-over-year to total 455,000, and subscription revenue increased 64% year-over-year to $53.4 million. Its average revenue per unit (ARPU) increased 14% year-over-year to $67.70. Total content hours streamed by its users increased 83% year-over-year to 133.3 million hours.

DISH’s top line increased 43% year-over-year to $4.5 billion for the third quarter ended September 30, 2020. The company closed the quarter with 11.42 million pay-TV subscribers, including 8.96 million DISH TV subscribers and 2.46 million SLING TV subscribers. Its net income increased 42.8% year-over-year to $504.6 million, yielding EPS of $0.86, which increased 30.3% year-over-year.

Thus, DISH is in an advantageous position here.

Expected Financial Performance

Analysts expect FUBO’s revenue and EPS to increase 83.6% and 60.1%, respectively, in 2021. In comparison, , the Street expects DISH’s revenue and EPS to increase 12.2% and 3.9%, respectively, in 2021.

POWR Ratings

While FUBO is rated “Sell” in our proprietary POWR Ratings system, DISH is rated “Neutral.” Here are how the four components of overall POWR Rating are graded for FUBO and DISH:

FUBO has a “D” for Trade Grade, and Peer Grade, an “F” for Buy & Hold Grade, and an “A” for Industry Rank. It is currently ranked #11 of 17 stocks in the Entertainment – Sports & Theme Parks industry.

DISH holds a “C” for Trade Grade, and Buy & Hold Grade, a “D” for Peer Grade, and an “A” for Industry Rank. It is currently ranked #10 in the same industry.

The Winner

While DISH is an established company in the television streaming service provider space, FUBO is an emerging player. DISH appears to be a better choice based on its superior financials. Moreover, the number of DISH’s subscribers should further rise at a faster rate compared to FUBO, as the cost of services that DISH’s Sling TV’s provides are much lower compared to FUBO’s services.

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DISH shares were trading at $32.28 per share on Thursday afternoon, up $0.46 (+1.45%). Year-to-date, DISH has declined -0.19%, versus a 1.21% rise in the benchmark S&P 500 index during the same period.

About the Author: Manisha Chatterjee

Since she was young, Manisha has had a strong interest in the stock market. She majored in Economics in college and has a passion for writing, which has led to her career as a research analyst. More...