FuboTV's Sports Angle Seen Driving Adoption Among 'Cord-Nevers'

FuboTV is well positioned to benefit from “cord-nevers,” who prefer customizable TV bundles of streaming content to “pre-determined MVPD programming,” Wedbush analyst Michael Pachter wrote investors Tuesday, initiating coverage. Its “lead with sports” strategy and competitive pricing offer avid sports fans “the first comprehensive alternative to pay-TV, which should continue to entice pay-TV subscribers to cut the cord and join” its vMVPD platform. Sports content has been the “hook” to reel in subscribers to pay TV, while news and entertainment drive increased viewer engagement, he noted. Competitive pricing and “comprehensive content offerings provide fuboTV a huge competitive advantage,” he said, seeing “rapid growth” for the next several years. Challenges for the company are branding and consumer awareness, plus marketing and user interface, Pachter said. When concerns are addressed, Wedbush expects fubuTV to grow its subscriber base by 50% or more per year for the next several years. Wedbush's 2023 revenue estimate doesn't reflect any contribution from fuboTV’s expected entrance into sports wagering in the latter half of 2021, Pachter said. Cord cutters and shavers are a 30 million addressable market now, likely growing by 3 million per year for the next 10 years, said the analyst. The stock closed 12.1% higher Wednesday at $29.70.