Needham maintained its buy rating and doubled its price target on fuboTV from $30 to $60 per share after the company has nearly quintupled its market value since its initial listing on the New York Stock Exchange in October. Fubo shares jumped 17.7% to $58.22 on Tuesday morning.
"We see FUBO as an inexpensive way for public investors to participate in the US consumer shift toward OTT and Streaming TV. FUBO is a skinny bundle (also known as a virtual MVPD) that markets itself as a 'sports-first' linear TV replacement. FUBO offers over 110 channels of live linear TV that represent about 84% of a typical large bundle's TV viewing, at $60/month, about half the typical MVPD price," analyst Laura Martin said.
On Monday, the company's shares soared on a report that fuboTV is examining exclusive sports content deals.
Needham raised its 2021 revenue estimate by 5% to $460 million from $439 million and its 2022 revenue estimate by 3% to $750 million from $730 million.
Needham says the key upside value drivers for fuboTV in 2021 include market share gains versus competitors, expansion of the fubo sports button's availability, the company taking steps to add a gambling revenue stream within 12 months and the strong short interest (12 million shares shorted, about 2 days average trading volume) which creates built-in demand for shares.
From a valuation point of view, Needham sees fuboTV with 62% upside relative to other comparable streaming services in its coverage universe.