Key points:
- FuboTV stock drops 7% as Needham analyst slashes price target from $60 to $15
- Various concerns weigh on the company's path to growth, including rising competition and chip shortages
FuboTV (NYSE: FUBO) stock has had a mixed reaction in the market lately. Whether bears are still hung up on the company’s disappointing Q3 results in November, or perhaps Omicron sentiment has contributed to a wider sell-off, well Needham analyst Laura Martin spy’s multiple reasons for the current downtrend, provoking a huge price target cut; from $60 to $15.
It’s not as Fubo hasn’t been expanding, the streaming platform has been rapidly adding to its digital services – honing in on key media providers in emerging markets in order to maximize new subscribers through a varied global footprint. Most recently, the company entered a partnership with Hemisphere Media Group to target U.S Hispanic and Latin American markets.
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However, Needham analyst Laura Martin seems to see through the consistent partnerships and points out some broader concerns. While she maintains a buy rating on the stock, such a drastic price cut alludes to some serious shortcomings. Martin refers to tougher competition, chip shortages, continued supply chain pressures, and rising interest rates all as headwinds for Fubo’s potential growth. However, she also points out that some of these are ‘short-lived and temporary’, meaning that Fubo might only suffer in the short term.
Following the analyst update, FuboTV entered trading with a loss of around 7% – with investors clearly heeding the strong price target cut. The stock may also have been affected by a knock-on effect from a poor earnings report from Netflix, which missed its target subscribers this quarter.