FUBO’s stock is approaching $ 200. Buy before it becomes parabolic

Not all short-squeeze actions are created equal. That’s why last week – in the midst of the biggest and widest short squeeze of the century – I told readers to forget about the likes of GameStop (NYSE:GME), AMC Entertainment (NYSE:AMC), Bed Bath & Beyond (NASDAQ:BBBY) and Koss (NYSE:KOSS) Instead, I referred readers to a live TV streaming service provider heavily shorted fuboTV (NYSE:FUBE)

Since then, the shares of GME, AMC, BBBY and KOSS have jumped violently. FUBO’s shares, however, rose more than 20%.

Why?

Because fuboTV is not just a short stock with enormous short-term potential. It is also a fundamentally strong action, with a lot of growth potential in the coming years.

We will see this bull scenario unfold as fuboTV develops its live TV streaming service ecosystem, the first of its kind, with dynamic sports betting capabilities. In other words, fuboTV’s stock has a ton of short-range firepower and solid fundamentals.

This is an explosive combination, which implies that (long after this tightening of the market is over) fuboTV’s stock will continue to rise as myopic bears are proven wrong by the fundamentals.

The best way to play the short squeeze that arrives is simple: buy FUBO shares on the spot and wait for your life. This stock goes $ 200 … on any less.

FUBO Shares: Heavy short interest

In the past few weeks, fuboTV has been caught in the huge sales squeeze that was shaking the markets because, well, the stock is one of the best-selling stocks on the market.

In the first half of December, fuboTV’s stock more than doubled in two weeks, due to the strong number of subscribers. The strength of fuboTV’s subscriber base largely foreshadows its big role in the world of live TV streaming.

In the wake of this major recovery, several short sellers targeted FUBO. The favorite argument among bears is that demand for live TV is dying, the streaming platform itself has become commoditized and the business model has been built on the basis of a broken economy. Fubo’s sold stake currently stands at around 65% of the float.

Then the little Reddit-inspired squeeze broke out. It wasn’t just GME’s stock that flew. All strongly sold shares flew along with GME shares. FUBO’s shares, with 65% of its short selling float, benefited from the growing tide of heavily sold names.

But this week, many of those short squeeze stocks have plummeted.

It’s not FUBO stock – and that’s because fuboTV is not GameStop or AMC.

Unlike GameStop, fuboTV is fundamentally strong

FuboTV – unlike many other heavily sold companies that fired last week – is supported by very strong fundamentals and has a long way to go for profitable growth.

Here’s the story.

Media consumption is shifting from linear TV to streaming TV because the latter is cheaper, more flexible and more convenient. Yet, although Netflix (NASDAQ:NFLX) has reached ubiquity among US households, most households still paying for cable TV, because Netflix doesn’t offer sports, live programming or news – three things Americans still love to watch.

That’s why a new generation of live TV streaming services has emerged in the past decade. These services take live TV content and package it into a streaming service – something like a “Netflix for TV”. Because demand for live TV is robust and because TV streaming offers significant advantages over linear TV, these live TV streaming services represent the future of TV and will one day be as common in homes as cable TV is. today.

fuboTV is one of those live TV streaming services. The difference is that it is a live TV streaming platform focused on sports. In other words, the company is hyper-focused on acquiring exclusive sports content and launching a digital sportsbook to enable dynamic sports betting through its live TV streaming platform.

In other words, FuboTV designs a live TV streaming service created especially for sports fans and players.

It is a great audience. About 70% of Americans classify themselves as sports fans. About 60% bet last year. That number is only growing with online sports betting becoming legal in more and more states.

Thus, fuboTV projects itself as a streaming platform that one day will have tens of millions of paid subscribers. It has only 500,000 paid subscribers today.

The growth path here is very long – and, consequently, the upside potential of FUBO’s shares is very large.

FuboTV stock for $ 200?

My numbers indicate that FUBO’s shares will rise to $ 200 in the coming years.

Here are those numbers.

I am largely assuming that fuboTV can reach about 10 million paid subscribers by 2030. I think the average revenue per subscriber per month can reach around US $ 70, aided by the growth in advertising and sports betting revenue. This implies about $ 8.4 billion in 2030 revenue for FuboTV.

I see EBITDA margins reaching 20%, as ad revenue and sports betting revenue add margin revenue firepower higher than the business model and increase margins.

Assuming yes, my modeling suggests that fuboTV is on track to generate about $ 10 in earnings per share by 2030.

Based on a 20X multiple, this implies a long-term price target for FUBO’s shares of $ 200.

Result of stock FUBO

Not all short squeeze actions are created equal. On the one hand, you have GME stock and AMC stock, which has a lot of short-compression firepower, but very weak fundamentals. On the other hand, you have FUBO stock, which has almost as much short-range firepower and solid fundamentals as well.

This is a powerful combination that should support the current upward trend in FUBO’s shares not only for the next few days – but also for the next few years.