FuboTV Has 'Thriving' Ad Business but Faces 'Near-Term Hurdles': Wedbush

FuboTV has a “solid head start” in offering live sports programming to its subscribers and has a “thriving and growing advertising business,” Wedbush analyst Michael Pachter wrote investors Monday, but the virtual MVPD is facing “slowing subscriber growth, fierce competition" and inflation, with rising content costs presenting "near-term hurdles.” Positives for Fubo are the shuttering of the “costly” sports wagering business, a new upfront advertising cycle and original content for the upcoming World Cup, Pachter said. Fubo’s Q3 ad average revenue per user was $7.37 vs. Wedbush’s estimate of $7.57, but despite “significant advertising weakness throughout the economy,” Fubo’s results indicate “some insulation” driven by live TV and sports-based programming, said the analyst. Management’s confidence about Q4 results stems partly from higher political advertising and an expected subscriber uptick from the World Cup, “which fuboTV will uniquely be broadcasting in 4K,” Pachter said. He maintained an “outperform” on the stock.