Back to top

Image: Bigstock

FuboTV's (FUBO) Fubo Gaming Launches Sportsbook in New Jersey

Read MoreHide Full Article

FuboTV (FUBO - Free Report) recently announced the launch of the Fubo Sportsbook in New Jersey. Sports enthusiasts aged 21 and above will now be permitted to place a variety of wagers on live and future sporting events using the Fubo Sportsbook app on iOS and Android or on the website.

The launch kicks off at an appropriate time with the commencement of the 2022-23 football season, making it one of the busiest sports betting periods and creating a great opportunity for the company to expand its user base.

With this launch, FuboTV becomes the first mobile sportsbook to integrate with a live TV streaming platform, creating a watching and wagering ecosystem in one place for its users. This integrated platform that includes enhanced product capabilities is going to provide the best viewing and gaming experience for consumers.

Increasing Efforts to Boost Ad Revenues and Aid Top Line

FuboTV is paving its path to profitability as it embarks on maximizing fill rates to increase ad revenues. It is also trying to increase margins with product improvements by selling higher-priced plans and ad-ons during sign-up. The percentage of new customers taking an unbundled paid add-on at sign-up has seen 3x growth in a year.

The company recently entered into a contract with Maximum Effort to issue $10 million worth of common stock to the latter. As part of the deal, Maximum Effort will launch Maximum Effort Network, a linear channel on FuboTV, whose sales will be managed by the latter. This will expand its content offering, allowing more subscribers to join.

FuboTV’s forward-looking plans project revenue generation in the range of $910-$930 million in North America on a full-year basis, representing 45% year-over-year growth and revenues of $20-$25 million from the rest of the world in the same period.

FUBO is also aiming for growth from its television business unit as it expects television to be interactive in the future. The company plans to integrate 100 free, ad-supported streaming (FAST) channels into its service by the end of the year. Out of those 100, 40 have already been integrated, boosting both its subscribers and advertisers.

Paid subscribers in North America grew 41% in the second quarter of 2022 while subscription revenues and advertising revenues grew to $194.4 million from $114.3 and $21.7 million from $16.5 million, respectively, on a year-over-year basis. This trend is expected to continue for the rest of 2022.

What Lies Ahead for FuboTV?

Though FUBO’s top line has been positive, the bottom line of the company has been bleeding for a while. It reported an adjusted EBITDA loss of $79.1 million for the second quarter of 2022 compared with a loss of $47 million in the prior-year quarter. It incurred a loss of 63 cents per share compared with the Zacks Consensus Estimate of a loss of 69 cents.

FuboTV faces stiff competition from DraftKings in the online iGaming business, which is expected to grow by more than $127 billion by 2027 per a report by Finsmes. While DraftKings (DKNG - Free Report) has been boosting its online sportsbook with a recent launch in Kansas, FUBO is intending to pull back from it and is looking to partner it up with somebody. The change in the gaming market in the last few years and the ongoing uncertainty of recession and inflation have moved Fubo’s confidence in it.

FUBO’s shares declined 76.1% year to date compared with DraftKings' decline of 40.4%. The Zacks Consumer Discretionary sector has declined 35% in the same period.

Zacks Rank & Stocks to Consider

FuboTV has a Zacks Rank #3 (Hold), currently.

Some better-ranked stocks in the Consumer Discretionary sector are BJ's Wholesale Club (BJ - Free Report) and Intercontinental Hotels Group (IHG - Free Report) , both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

BJ shares have gained 15.8% year to date. The Zacks Consensus Estimate for fiscal 2023 earnings has moved 8.7% upward over the past 30 days to $3.60 per share.

IHG shares are down by 16.2% year to date. The Zacks Consensus Estimate for 2022 earnings has shifted upward by 9% over the past 30 days to $2.77 per share.

Published in