The shares of Live TV streaming platform fuboTV Inc. (FUBO) have retreated 75.8% in price over the past year and 59.4% over the past three months to close yesterday's trading session at $8.55. In addition, the stock is currently trading below its 52-week high of $43.28, which it hit on March 2, 2021.

Though the New York City company posted 106% growth in its total paid subscribers in its recent fourth-quarter earnings release, it reported a significant net loss for its fiscal year 2021. Furthermore, its high operating costs and broadcasting charges have outweighed its revenue generation.

While the company is making efforts to build and expand its membership base by investing in new content, it faces stiff competition from TV streaming behemoths like YouTube TV and Disney+.

Here's what could shape FUBO's performance in the near term:

Negative bottom line

FUBO's revenue increased 119.9% year-over-year to $231.06 million for the fourth quarter, ended Dec. 31, 2021. Its operating loss grew 19.2% from the prior-year quarter to $110.01 million. The company's net loss came in at $111.96 million, while its loss per share amounted to $0.76. In addition, its net cash used in operating activities increased 29.2% for the year ended Dec. 31, 2021, to $192.60 million.

Poor Profitability

FUBO's 0.79% trailing-12-months CAPEX/Sales multiple is 79.5% lower than the 3.9% industry average. Also, its ROA, ROC, and net income margin are negative 27.9%, 26.6%, and 59.9%, respectively. And its trailing-12-month cash from operations stood at negative $192.60 million compared to the $299.71 million industry average.

POWR Ratings Reflect Uncertainty

FUBO has an overall D rating, which equates to Sell in our proprietary POWR Ratings system. The POWR ratings are calculated considering 118 different factors, with each factor weighted to an optimal degree.

Our proprietary rating system also evaluates each stock based on eight different categories. FUBO has an F grade for Stability and Quality. The stock’s 3.11 beta is consistent with the Stability grade. In addition, the company's weak financials and poor profitability are in sync with the Quality grade.

Among the 15 stocks in the F-rated Entertainment – Sports & Theme Parks industry, FUBO is ranked last.

Beyond what I've stated above, one can view FUBO ratings for Value, Growth, Sentiment, and Momentum here.

Bottom Line

Given the competitive streaming market, FUBO's weak profitability and inability to generate profits may stifle its growth in the near term. The stock is currently trading below 50-day and 200-day moving averages of $12.28 and $22.89, respectively, indicating a downtrend. In addition, analysts expect its EPS to decline 5.1% in the current quarter (ending March 2022) and remain negative in its fiscal 2022 and 2023. Therefore, we believe the stock is best avoided now.

How Does fuboTV Inc. (FUBO) Stack Up Against its Peers?

While FUBO has an overall D rating, one might want to consider its industry peers, SeaWorld Entertainment Inc. (SEAS), which has an overall B (Buy) rating.

FUBO shares fell $0.09 (-1.05%) in premarket trading Tuesday. Year-to-date, FUBO has declined -44.91%, versus a -8.07% rise in the benchmark S&P 500 index during the same period.

Pragya is an equity research analyst and financial journalist with a passion for investing. In college she majored in finance and is currently pursuing the CFA program and is a Level II candidate.

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