What Happened to the FUBO Stock Price?
- Shares of live TV streaming service provider fuboTV (NASDAQ:FUBO) have been crushed recently as investors have shunned growth stocks, but FUBO stock has shown signs of life recently.
- Over the past week, fuboTV’s stock has popped 25%.
- Shares still remain nearly 60% off FUBO’s early February highs.
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Why FuboTV Stock Is Trending
- The growth trade is back.
- For the back-half of February and throughout most of March, investors piled into the “reflation” trade.
- That means investors sold the technology stocks that dominated in 2020 because they were able to grow revenues and profits even amid the Covid-19 pandemic, and bought physical-economy stocks that struggled in 2020 because they were not able to grow during the pandemic.
- FUBO stock was caught on the wrong side of this pivot, as a richly-valued technology company that had its best year ever during the pandemic.
- This reflation trade has lost steam in April.
- Over the past month, the Vanguard Growth ETF (NYSEMKTS:VUG) is up more than 10%, while the Vanguard Value ETF (NYSEMKTS:VTV) is up less than 4%.
- It appears investors are bracing for a big growth surge in the second quarter of 2021, and then much more moderate growth in the second-half of the year and into 2022.
- This expectation of a moderate growth environment post-Q2 has led investors to ditch the reflation trade (which is reliant on huge economic growth) and pile back into technology stocks (which feature much more durable growth prospects).
- FUBO stock has been a winner as the reflation trade has died and the growth trade has reemerged.
Does It Matter?
- We suspect the growth trade will remain alive and well for the foreseeable future.
- The reality is the economy is very strong for upper-income folks, and not that strong for lower-income folks. The “pent-up demand” thesis is also overplayed as many parts of the country have been open for months now, and some of that demand has already been unleashed. You will get a surge in economic activity in the second quarter of 2021, and then the economy will revert back to its normal “slow growth” self.
- In that environment, rates will remain low and growth stocks will outperform.
- Also assisting FUBO stock will be an acceleration of cord-cutting trends and big shift in TV ad spending.
- According to a new report from S&P Global, legacy MVPDs (cable, satellite, and telecom) are set to lose 8.2% of their subscribers this year, and 10.3% in 2022.
- eMarketer projects that, largely because of accelerating cord-cutting trends and a rebound in ad spending, that connected TV video ad spending will rise a whopping 54.4% in 2021.
- The stage is set for FUBO stock to continue outperform in 2021.
FUBO Stock Price Forecast
- The consensus analyst price target on FUBO stock is $45.
- We think shares are worth at least $50, based on the company’s long-term earnings growth potential. This assumes that fuboTV successfully builds the world’s first integrated sports-betting-and-streaming platform that becomes avid sports fans’ go-to service.
- We see 100%-plus upside in shares over the next 12 months.
FUBO stock is a great play on the fact that the world is pivoting from linear TV to streaming TV. This pivot encompasses fuboTV, Netflix (NASDAQ:NFLX), Roku (NASDAQ:ROKU), Disney (NYSE:DIS), AT&T (NYSE:T) and so many more. By the end of the decade, everything we watch will be through the internet. Cable boxes will be as obsolete as CD players are today.
Netflix stock is the blue-chip stock to buy to play this streaming revolution. Roku stock is a higher-upside but still relatively safe bet. fuboTV stock may be the highest upside play in the space. That’s why it belongs in my Innovation Investor portfolio, which is focused on investing in emerging companies pioneering breakthrough technologies and business models which could change the world.
FuboTV fits that billing. It’s the next Netflix.
But it’s one of dozens stock picks in this ultra-exclusive portfolio.
To get the names, ticker symbols, and key business details of the rest of these potential 10X stock picks, subscribe to Innovation Investor here.
On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.
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