Earnings Release: Here's Why Analysts Cut Their fuboTV Inc. (NYSE:FUBO) Price Target To US$3.08

As you might know, fuboTV Inc. (NYSE:FUBO) recently reported its annual numbers. Revenue hit US$1.4b in line with forecasts, although the company reported a statutory loss per share of US$1.04 that was somewhat smaller than the analysts expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on fuboTV after the latest results.

View our latest analysis for fuboTV

Taking into account the latest results, the current consensus from fuboTV's eight analysts is for revenues of US$1.56b in 2024. This would reflect a meaningful 14% increase on its revenue over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 20% to US$0.78. Before this latest report, the consensus had been expecting revenues of US$1.62b and US$0.81 per share in losses. It looks like there's been a modest increase in sentiment in the recent updates, with the analysts becoming a bit more optimistic in their predictions for losses per share, even though the revenue numbers fell somewhat.

The analysts have cut their price target 16% to US$3.08per share, suggesting that the declining revenue was a more crucial indicator than the forecast reduction in losses. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on fuboTV, with the most bullish analyst valuing it at US$5.00 and the most bearish at US$2.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that fuboTV's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 14% growth on an annualised basis. This is compared to a historical growth rate of 60% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 10.0% per year. Even after the forecast slowdown in growth, it seems obvious that fuboTV is also expected to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. They also downgraded fuboTV's revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. Even so, long term profitability is more important for the value creation process. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of fuboTV's future valuation.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for fuboTV going out to 2026, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 3 warning signs with fuboTV , and understanding them should be part of your investment process.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.