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FuboTV (NYSE:FUBO) beat expectations in the third quarter on solid subscriber momentum and a return to positive adjusted EBITDA, but the stock weakened as price-sensitive growth pressured ARPU and raised concerns over 2026 forecasts following its Hulu + Live TV merger. Needham analysts, led by Laura Martin, maintained their Buy rating on FuboTV and a $4.25 price forecast, citing the company’s earnings performance. FuboTV posted revenue of $377.2 million, down 2% from a year earlier but 7% above Needham’s estimate, and adjusted EBITDA of $6.9 million, compared with a $27.6 million loss in the prior-year period and well ahead of the firm’s loss of $6.7 million estimate. The company completed its merger with Hulu + Live TV three days before the report. Also Read: FuboTV Shares Are Trading Higher Wednesday: What’s Going On? Despite the better-than-expected results, Fubo’s shares declined, pressured by negative revenue growth, lower ARPU (Average Revenue Per User) from its new skinny-bundle tier, negative free cash flow, and lowered fiscal 2026 estimates. Needham said it remains constructive on the stock, citing Disney’s (NYSE:DIS) 70% ownership stake, improved scale with 6 million pro forma subscribers, lower content costs, expanded bundling options, and integration of the advertising business into Disney. The firm highlighted Fubo’s reaffirmed long-term goal of $100 ARPU and 30% EBITDA margins, noting the current ARPU of $95 and margins of around 20%. Subscriber Growth and Skinny Bundle Strategy The company launched a new $55/month super-skinny bundle on September 2 to address growing price sensitivity, with promotional pricing at $45. Despite the lower price, Fubo reported no cannibalization of existing customers, analysts noted. At the end of the quarter, North American paid subscribers reached 1.63 million, up 1.2% year-over-year, as churn fell by roughly 50%, and trial conversions and net additions improved even with reduced marketing spend. Advertising Revenue and International Expansion Analysts noted that Fubo’s ad revenue fell 6% to $25.4 million, but still beat forecasts by 22%. North America ads declined 7%, while international ads surged 70%. About 75% came from programmatic sales, with direct deals earning a 15% CPM premium. The ad business has been fully integrated into Disney. In France, Fubo plans to integrate its Molotov service into the U.S. platform and collaborate with Disney to tap into Disney+’s 100 million international subscribers. The company aims to build a global sports and live TV streaming platform. Its FAST channels generated about $3 million, up 20% year-over-year, from a lineup of 200 channels. Strategic Value and Financial Modeling Needham said Fubo’s sports-first positioning and skinny bundle model provide strong strategic value. Disney’s majority ownership reduces financial risk while maintaining upside. The firm sees the company as a low-cost way for investors to gain exposure to U.S. streaming trends. Needham’s $4.25 price forecast is based on a 10-year Discounted Cash Flow using an 11.5% Weighted Average Cost of Capital and assumes 10.9% annual EBITDA growth over the next decade. For fiscal 2025, Needham projects revenue of $1.57 billion with an earnings per share of 40 cents and adjusted EBITDA of $30.4 million. Fiscal 2026 estimates were lowered to $1.56 billion in revenue, earnings per share of 15 cents loss, and $72.6 million in adjusted EBITDA. Price Action: FUBO shares were trading higher by 5.35% to $3.645 at last check Tuesday. Read Next: What’s Going On With Palantir Technologies Stock Today? Photo by Anna Quelhas via Shutterstock
