fuboTV (FUBO)

Live sports and TV streaming service fuboTV (NYSE:FUBO) missed Wall Street’s revenue expectations in Q1 CY2025 as sales rose 3.5% year on year to $416.3 million. Its non-GAAP loss of $0.02 per share was $0.01 above analysts’ consensus estimates.

Company Overview

Originally launched as a soccer streaming platform, fuboTV (NYSE:FUBO) is a video streaming service specializing in live sports, news, and entertainment content.

The advent of the internet changed how shows, films, music, and overall information flow. As a result, many media companies now face secular headwinds as attention shifts online. Some have made concerted efforts to adapt by introducing digital subscriptions, podcasts, and streaming platforms. Time will tell if their strategies succeed and which companies will emerge as the long-term winners.

Competitors in the live TV streaming market include YouTube TV (owned by NASDAQ:GOOGL), Comcast (NASDAQ:CMCSA), Charter Communications (NASDAQ:CHTR), and DISH Network (NASDAQ:DISH).

A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last five years, fuboTV grew its sales at an incredible 57.5% compounded annual growth rate. Its growth beat the average consumer discretionary company and shows its offerings resonate with customers.

Long-term growth is the most important, but within consumer discretionary, product cycles are short and revenue can be hit-driven due to rapidly changing trends and consumer preferences. fuboTV’s annualized revenue growth of 22.5% over the last two years is below its five-year trend, but we still think the results suggest healthy demand.

We can dig further into the company’s revenue dynamics by analyzing its number of domestic subscribers and international subscribers, which clocked in at 1.47 million and 354,000 in the latest quarter. Over the last two years, fuboTV’s domestic subscribers averaged 13.4% year-on-year growth while its international subscribers were flat.

This quarter, fuboTV’s revenue grew by 3.5% year on year to $416.3 million, falling short of Wall Street’s estimates.

Looking ahead, sell-side analysts expect revenue to grow 33.6% over the next 12 months, an improvement versus the last two years. This projection is eye-popping and suggests its newer products and services will spur better top-line performance.

Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.

fuboTV’s operating margin has been trending up over the last 12 months, but it still averaged negative 13.9% over the last two years. This is due to its large expense base and inefficient cost structure.

This quarter, fuboTV generated a negative 6.1% operating margin. The company's consistent lack of profits raise a flag.

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Although fuboTV’s full-year earnings are still negative, it reduced its losses and improved its EPS by 59.7% annually over the last four years. The next few quarters will be critical for assessing its long-term profitability.

In Q1, fuboTV reported EPS at negative $0.02, up from negative $0.11 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street is optimistic. Analysts forecast fuboTV’s full-year EPS of negative $0.16 will reach break even.

If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.

While fuboTV posted positive free cash flow this quarter, the broader story hasn’t been so clean. Over the last two years, fuboTV’s demanding reinvestments to stay relevant have drained its resources, putting it in a pinch and limiting its ability to return capital to investors. Its free cash flow margin averaged negative 1.4%, meaning it lit $1.42 of cash on fire for every $100 in revenue.

fuboTV’s free cash flow clocked in at $157.7 million in Q1, equivalent to a 37.9% margin. Its cash flow turned positive after being negative in the same quarter last year, but we wouldn’t read too much into the short term because investment needs can be seasonal, causing temporary swings. Long-term trends are more important.

Over the next year, analysts predict fuboTV’s cash conversion will fall to break even. Their consensus estimates imply its free cash flow margin of 8.4% for the last 12 months will decrease by 9.9 percentage points.

EPS and free cash flow tell us whether a company was profitable while growing its revenue. But was it capital-efficient? Enter ROIC, a metric showing how much operating profit a company generates relative to the money it has raised (debt and equity).

fuboTV’s five-year average ROIC was negative 63.4%, meaning management lost money while trying to expand the business. Its returns were among the worst in the consumer discretionary sector.

We like to invest in businesses with high returns, but the trend in a company’s ROIC is what often surprises the market and moves the stock price. Over the last few years, fuboTV’s ROIC has increased. This is a good sign, but we recognize its lack of profitable growth during the COVID era was the primary reason for the change.

Debt is a tool that can boost company returns but presents risks if used irresponsibly. As long-term investors, we aim to avoid companies taking excessive advantage of this instrument because it could lead to insolvency.

fuboTV posted negative $48.67 million of EBITDA over the last 12 months, and its $365 million of debt exceeds the $321.6 million of cash on its balance sheet. This is a deal breaker for us because indebted loss-making companies spell trouble.

We implore our readers to tread carefully because credit agencies could downgrade fuboTV if its unprofitable ways continue, making incremental borrowing more expensive and restricting growth prospects. The company could also be backed into a corner if the market turns unexpectedly. We hope fuboTV can improve its profitability and remain cautious until then.

fuboTV's revenue missed significantly. While EBITDA beat, it was not enough for the market to get excited, and the stock traded down 1.9% to $2.85 immediately following the results.

Updated: July 10, 2025 at 10:27 PM EDT

The latest quarterly earnings matters, sure, but we actually think longer-term fundamentals and valuation matter more. Investors should consider all these pieces before deciding whether or not to invest in fuboTV.

fuboTV isn’t a terrible business, but it doesn’t pass our bar. Although its revenue growth was exceptional over the last five years, it’s expected to deteriorate over the next 12 months and its Forecasted free cash flow margin suggests the company will ramp up its investments next year. And while the company’s projected EPS for the next year implies the company’s fundamentals will improve, the downside is its relatively low ROIC suggests management has struggled to find compelling investment opportunities.

fuboTV’s EV-to-EBITDA ratio based on the next 12 months is 137.5x. This multiple tells us a lot of good news is priced in - you can find more timely opportunities elsewhere.

Wall Street analysts have a consensus one-year price target of $4.33 on the company (compared to the current share price of $3.47).

Although the price target is bullish, readers should exercise caution because analysts tend to be overly optimistic. The firms they work for, often big banks, have relationships with companies that extend into fundraising, M&A advisory, and other rewarding business lines. As a result, they typically hesitate to say bad things for fear they will lose out. We at StockStory do not suffer from such conflicts of interest, so we’ll always tell it like it is.