No one expected FuboTV (FUBO 4.56%) to be one of just four exchange-listed stocks with market caps north of $900 million to have doubled this year, but here we are. The live TV streaming service catering to sports fans saw its stock soar in January after brokering a deal with Disney (DIS 2.60%) that will eventually find the iconic media giant owning a 70% stake in the business.
There's a lot to like about the unlikely pairing with Disney, but it doesn't mean that the upticks are over. No matter how the future plays out, Fubo is in a better position to succeed than it was at the start of this year. Let's take a closer look at why Fubo is a stock that you should buy like there's no tomorrow.
NYSE: FUBO
Key Data Points
1. A future with Disney would be a fairy-tale ending
The deal with Disney is still about a year away from closing as the partnership isn't expected to close until the first half of next year. The combination is tantalizing for both parties. Fubo will get an infusion of credibility, scalability, and liquidity. Disney will get to see if a less distracted company can help boost the prospects for its Hulu + Live TV offerings that is losing ground to the market leader.
Providers of live TV streaming services -- a niche of the digital market that tries to duplicate the traditional cable or satellite television platform with enhanced features -- are still largely neglected by consumers. Just 40% of the country is still subscribing to an old-school cable or satellite TV platform, but most of the other 60% isn't hopping on the next-gen alternative.
There are roughly 20 million U.S. homes subscribing to a live TV streaming service, and 8 million of them belong to Alphabet's (GOOG 2.81%) (GOOGL 2.74%) YouTube TV. Fubo had just 1.7 million paid subscribers at the end of 2024, less than 10% of the market. Disney's live TV streaming platform has 4.6 million subscribers. Pairing up the two platforms would give them a fighting chance against Alphabet.
The good news is that these small audiences pay big money to digitally re-create the cable TV experience. Largely through subscription premiums -- but also with the ad revenue that it collects on top of that -- the average revenue per Fubo account is $87.90 a month. If you think that's high, Disney's Hulu + Live TV is taking in an average of $99.22 per subscriber.
The bad news is that the reason why the subscription rates are so high is that the broadcasters, networks, and channels on the platform that retain the lion's share of that keep asking for more at every renewal. Price is the main reason that the cable TV market has lost a third of its audience over the past decade. It's also why folks are gravitating to cheaper premium streaming services instead of the costly live TV bundles. Pairing up Fubo with Hulu + Live TV gives the former access to Disney's audience and ad team. Disney gets a differentiated sports-centric player than its own ESPN+. Fubo is also growing faster, with revenue rising 19% over the past year. The combination would result in synergies beyond the obvious economies of scale.
Image source: Getty Images.
2. Fubo on its own wouldn't be so bad
There is always the risk that any deal could fall apart on regulatory concerns or just a change of heart by the House of Mouse. Disney is a big company, even if the combined company would still be a lot smaller than YouTube TV. This is probably good time to point out how Fubo was already making big steps in improving its business.
Fubo generated its first quarter of positive free cash flow in the fourth quarter. Analysts see Fubo turning profitable on an adjusted basis next year, turning that corner on a reported basis in 2027. Those same Wall Street pros see low double-digit revenue growth for Fubo in the next couple of years as a stand-alone company.
Then we get to the consolation prizes that Fubo has scored or can collect. Fubo receives $130 million from Disney if the partnership fails to make it to the finish line next year. At the time the deal was announced, Fubo agreed to a $220 million settlement for dropping its injunction against Venu Sports, a Disney-led consortium of three sports programming giants that wanted to band together. Venu Sports folded a few days later, but Fubo is still getting $220 million now, another $130 million if it doesn't pair up with Disney next year, and access to $145 million in term loan from Disney.
Even without the financing option, Fubo would have $350 million as a stand-alone company that it didn't have at the start of this year. Despite more than doubling this year, its market cap has only increased by less than $550 million this year. In other words, most of its year-to-date surge is already covered by its newfound cash infusion.
3. The recent pullback is an opportunity
The only thing more surprising than Fubo doubling in 2025, is that the shares had quintupled shortly after the partnership and court settlement were announced. In other words, it has already given back more than half of January's peak value.
On its own, Fubo will be fine. It will have a pair of nine-figure paydays in its back pocket, that it can use to amplify growth opportunities alongside its newfound positive free cash flow. The prospects could be even better with Disney owning 70% of the company, but with Fubo's management at the wheel. Fubo will be the country's second-largest live TV streaming service. It will have the marketing muscle and global prestige of Disney in its corner.
Hulu + Live TV streaming has always been in Disney's back burner. While Disney keeps trying to bundle Disney+ (124.6 million subscribers), Hulu (49 million), and ESPN+ (24.9 million), its live TV streaming service is seemingly an afterthought. Why does it serve less than 10% of Hulu subscribers or less than 4% of Disney+ members? I would be surprised if under Fubo's laser-focused autonomy that the combined platform doesn't grow to seriously take on Alphabet's YouTube TV for market leadership. All roads seem to lead to Fubo moving higher, making this a stock to buy like there's no tomorrow.
