FuboTV (NYSE:FUBO) stock has generated over 175% returns in the past 12-months. The company is establishing itself as a leader in the sports streaming realm as it differentiates itself from its entertainment-focused peers.
With growth catalysts in its advertising business and its foray into the sports betting industry, expect FUBO stock to take off.
FUBO stock has had a topsy turvy run at the market this year. It traded at $24 and some change at the beginning of the year and climbed as high as $52.40 in early February.
Since then, it has been on a negative run generating just 6% returns in the past six months.
However, analysts are bullish on its long-term potential. Mean price targets for FUBO stock are currently over 36% higher than its current price.
Hence, the stock is trading at a massive discount based on its long-term growth runway.
Impressive Revenue Growth Will Drive FUBO Stock
FuboTV has been on a roll as far as its revenue growth is concerned. It witnessed a remarkable 83% increase in its full-year revenue growth from 2019 to 2020.
Moreover, it estimates that its revenues will grow by roughly 101% this year. That seems like a tall order, but it’s on track to deliver on its promises based on its first-quarter results.
Revenues shot up to $119.7 million, growing by 135% with immense strength. Its subscriber base increased by 105% on a year-over-year basis to 590,430.
Additionally, its average revenue per user per month rose to $69.09, representing a 28% increase from the prior year period. However, due to an 80% increase in expenses, its net loss widened slightly to $70.2 million.
Looking at FuboTV’s membership base currently, it has a massive potential to expand its customer base significantly in the future
Massive Sports Betting Opportunity
FuboTV has done incredibly well to market itself as a purely sports-centric platform, with a huge content library parallel to none. Investors have high hopes for the platform when it launches its sports betting update in the fourth quarter.
Its competitive advantage in its live streaming niche should have it relatively easy to increase its live sports betting users. The ability for the platform to become a one-stop shop for live sports streaming and sports betting will create massive synergies for the business in the long run.
It’s plausible to assume that FuboTV should have a hard time competing with industry stalwarts such as DraftKings (NASDAQ:DKNG). However, its betting service is on par with its peers at this time and has a lot of potential to grow at an impressive rate.
The sports betting market is a relatively nascent industry; 35 states in the U.S. are left to legalize online sports betting. As a result, FuboTV has an incredible opportunity to grab a healthy market share in these states due to its streaming and betting synergies.
Moreover, the company’s robust competitive advantage will continue fueling subscriber growth for the company. It can then leverage its massive customer base for sports betting and advertising initiatives
Bottom Line on FUBO Stock
FuboTV has established a dominant position in the live sports streaming industry. It continues to build its subscriber base and still has a substantial share of the market that it has yet to tap into.
Moreover, it is leveraging its user base to drive revenues for its hugely profitable sports betting and advertising segments.
FUBO stock is had a bright future ahead and is significantly undervalued based on its incredible growth outlook.
On the date of publication, Muslim 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.