FuboTV stock soars amid robust growth and ambitious future plans

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FuboTV stock soars amid robust growth and ambitious future plans
Credit: © Reuters.

In recent news, FuboTV (NYSE: FUBO ), a sports-focused subscription video on demand (SVOD) service, has seen its stock price surge by an impressive 97% from its 52-week low of $0.96 to $2.49 as of Friday. This significant increase is largely due to the company's strong growth and ambitious future targets, including its aim to achieve positive cash flow by Fiscal Year 2025.

Despite operating in an industry teeming with competition from major players such as Netflix (NASDAQ: NFLX ), Disney (NYSE: DIS ), Amazon (NASDAQ: AMZN ), and AT&T (NYSE: T ), FuboTV has demonstrated significant growth potential. Its Q2 results revealed a revenue growth of 41%, amounting to $312.7 million, an acceleration from the previous quarter's growth of 34%.

Alongside this, FuboTV reported a 23% increase in subscribers to 1.167 million, and a 13% boost in average revenue per user (ARPU) to $81.62 - a new record for the company. These figures indicate strong consumer demand for FuboTV's unique sports-oriented live SVOD model. In addition, the company's North American segment reported revenues of $305 million, surpassing management's previous guidance of $295 million.

The company's Q2 2023 adjusted EBITDA margin improved from -31.6% to -9.8%, signaling scalability of its business model despite previous concerns. Furthermore, the operating loss for the quarter was reported at $52.5 million, a marked improvement from last year's loss of $91.4 million.

As of Q2 end, FuboTV held $300 million in cash, cash equivalents, and restricted cash. The current stock price represents 0.6 times the midpoint of management's projected revenues for the current year.

Wall Street consensus rating for FuboTV, based on one Buy and three Holds assigned in the past three months, indicates a 60.6% upside potential at a $4.00 average stock forecast.

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