Sports-First FuboTV Positioned for Cord Cutters: Wedbush

FuboTV is “well-positioned” in the cord-cutter era with its “lead with sports” strategy, Wedbush's Michael Pachter wrote investors Thursday. “We expect cord-cutting and cord-shaving to continue for the foreseeable future, and think that a sizeable portion of the population will grow up as ‘cordnevers,’ preferring customizable bundles of content to pre-determined MVPD programming,” said the analyst, pegging the addressable market at about 30 million, growing at 3 million per year over the next 10. Pachter cited as positives for fuboTV its revenue guidance for 60% growth, “robust” average revenue per user advertising growth during fiscal 2020 and its advances in the sports betting market. The streaming service will launch a free-to-play wagering app in Q3, with a sportsbook to follow in Q4, Pachter noted. It plans to launch a free interactive predictive game initially to subscribers and later to all consumers in Q3 to learn from customer behavior and then tailor a sports wagering product to be offered through its sportsbook in Q4, he said. The sportsbook will likely generate only minimal revenue at launch, but “the creation of a free-to-play product rolled out to all consumers has the potential to drive word of mouth about fuboTV,” which could drive new subscriptions, he said: “We are optimistic that the sports book can drive material revenues and profitability in the next several years.” Wedbush forecasts fuboTV Q1 revenue of $103 million vs. company guidance of $100 million-$103 million when the company reports earnings Tuesday.