By Wayne Duggan
Investors who bought stocks during the COVID-19 market crash in 2020 have generally experienced some big gains in the past 2 1/2 years.
But there was no question some big-name stocks performed better than others since the pandemic bottom.
One company that has been a horrible investment: streaming video company FuboTV Inc.
FuboTV was one of the hottest stocks of 2020, a year in which the company reached nearly 550,000 subscribers. A primary bull thesis driving those huge returns was that FuboTV could monetize its user base, especially via the company’s plans to offer sports betting on its platform. FuboTV is a sports-centric service.
Instead, FuboTV investors have spent the last two years watching competing platforms jumping out to first-mover advantages in U.S. sports betting.
Meanwhile, FuboTV continues to generate losses from its core business, including a $108-million loss in the third quarter of 2022 on just $224.8 million in revenue.
On a positive note, the company’s user base continued to grow rapidly. North American paid subscribers reached 1.231 million in the third quarter, up 31% from a year ago.
For now, FuboTV is a relatively small player in the streaming TV market, but it is gaining market share from its competitors. There is a massive potential market of traditional pay TV households up for grabs. If the company can demonstrate a long-term path to profitability, FuboTV could have tremendous upside potential.
At the beginning of 2020, FuboTV shares were trading at $9.58. By the beginning of March, the stock was down to $7.77. When the market crashed during the U.S. COVID-19 outbreak, FuboTV shares dropped as low as $5 on April 2, 2020, during the height of the pandemic fears.
When the market bounced off those lows, FuboTV began to rebound as well. The stock reached $22 per share in May before the recovery rally fizzled out.
FuboTV uplisted from the OTC market to the NYSE in October 2020 and regained the momentum of the broader market in the fourth quarter. The stock skyrocketed as high as $62.29 in December 2020. Unfortunately, that level would mark the stock’s pandemic high.
Despite consistently impressive growth numbers, FuboTV’s heavy losses and lack of significant progress in sports betting weighed on the stock in 2021.
FuboTV stock hit its 2021 highs above $50 in late January but pulled back to its low of the year at $14.64 in May. After several months of trading above $20, FuboTV finished 2021 below $16.
FuboTV continued to struggle in a difficult market that punished growth stocks in 2022. The stock dropped all the way to a post-up listing low of $1.61 in the opening days of 2023 before bouncing to $2.19 today.
Unfortunately, investors who bought FuboTV on the day it hit its 2020 pandemic low and held on have generated a horrible return on their investment. In fact, $1,000 in FuboTV stock bought on April 2, 2020, would be worth about $236 today.
Looking ahead, analysts are expecting FuboTV’s stock to rebound in the next 12 months. The average price target among the five analysts covering the stock is $5, suggesting a 128.3% upside from current levels.
Produced in association with Benzinga.
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