fuboTV Inc. (FUBO - Get Rating) functions as a live TV streaming platform for live sports, news, and entertainment content in the United States and worldwide. Its fuboTV platform permits customers to access content through streaming devices and on SmartTVs, computers, mobile phones, and tablets.

The stock has declined 84.1% year-to-date and 91.1% over the past nine months since investors have turned away from high-growth yet unprofitable companies. Despite achieving strong growth in subscribers and revenue, with North American subscriber growth of 81% year-over-year, the company experienced some pressure on adjusted contribution margin due to slower ad sales growth in a less robust advertising market than initially expected.

Analysts have lowered their FY22 estimates for FUBO stating growing competition in the vMVPD space, slower streaming ad-revenue growth, and weakening U.S. consumer spending. The stock closed its last trading session at $2.46.

Here is what could shape FUBO’s performance in the near term:

Weak Financials

For the first quarter ending March 31, 2022, FUBO’s operating loss increased 107.8% year-over-year to $135.24 million. The company’s net loss increased 100.7% from its year-ago value to $140.72 million, while its loss per share grew 50.8% from its prior-year quarter to $0.89. Its net cash used in operating activities grew 135.2% year-over-year to $126.69 million.

Poor Profitability

The trailing-12-month gross profit margin is negative 3.98% compared to the industry average of 50.74%. Moreover, the trailing-12-month net income margin, ROE, ROC, and ROA are negative at 59.61%, 65.5%, 24.88%, and 31.15%, respectively, compared to their positive industry averages.

POWR Ratings Reflect Bleak Outlook

FUBO has an overall F rating, equating to Strong Sell in our proprietary POWR Ratings system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.

Our proprietary rating system also evaluates each stock based on eight distinct categories. FUBO has an F grade for Stability and Quality. The stock’s beta of 3.66 is in sync with the Stability grade. Its poor profitability is consistent with its Quality grade.

In addition, it has a D grade for Growth, which is justified given its bleak financial performance.

Among the 16 stocks in the F-rated Entertainment – Sports & Theme Parks industry, FUBO is ranked last.

Beyond what I’ve stated above, you can view FUBO ratings for Momentum, Value, and Sentiment here.

Bottom Line

FUBO has declined 90.4% over the past year. Given its weak financials and poor profitability, it could be difficult for the company to recover anytime soon. So, the stock is best avoided now.

How Does fuboTV Inc. (FUBO) Stack Up Against its Peers?

While FUBO has an overall POWR Rating of F, one might want to consider its industry peer, Endeavor Group Holdings, Inc. (EDR - Get Rating), which has an overall B (Buy) rating.

FUBO shares were trading at $2.51 per share on Friday afternoon, up $0.04 (+1.62%). Year-to-date, FUBO has declined -83.83%, versus a -18.31% rise in the benchmark S&P 500 index during the same period.

About the Author: Spandan Khandelwal

Spandan's is a financial journalist and investment analyst focused on the stock market. With her ability to interpret financial data, she aims to help investors evaluate the fundamentals of a company before investing. More...

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