What Happened?
Shares of live sports and TV streaming service fuboTV (NYSE: FUBO) jumped 5% in the morning session after the company reported a drop in subscribers and a year-over-year revenue decline for its second quarter, which overshadowed beats on profit and revenue expectations. The sports-focused streaming platform saw its domestic subscribers fall by 94,000 year-over-year to 1.36 million. Total revenue also dipped by 2.8% to $380 million. Despite these declines, the results were not all negative. Fubo posted an adjusted earnings per share (EPS) of $0.05, reversing a loss from the same quarter last year and beating analyst estimates. It also generated a positive Adjusted EBITDA of $20.67 million, another bright spot in the report. However, investors appeared to focus more on the shrinking subscriber base and revenue, which are critical performance indicators for streaming services.
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What Is The Market Telling Us
fuboTV’s shares are extremely volatile and have had 65 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 4 days ago when the stock gained 7.2% on the news that markets rebounded following a sharp sell-off in the previous trading session as weaker-than-expected U.S. jobs data fueled investor hopes for a potential interest rate cut by the Federal Reserve. The July Nonfarm Payrolls report revealed a gain of only 73,000 jobs, significantly below the 110,000 expected. Compounding the news, prior months' figures were revised downward by over 250,000 jobs. This data, indicating a cooling labor market, has led investors to dramatically increase bets on a September interest rate cut by the Federal Reserve, with the probability jumping to over 80% according to the CME FedWatch Tool. The prospect of lower borrowing costs typically stimulates economic activity and boosts consumer spending on non-essential goods and services, which directly benefits companies in the consumer discretionary space.
fuboTV is up 176% since the beginning of the year, but at $3.89 per share, it is still trading 28.8% below its 52-week high of $5.46 from January 2025. Investors who bought $1,000 worth of fuboTV’s shares 5 years ago would now be looking at an investment worth $388.50.
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