3 Reasons to Sell FUBO and 1 Stock to Buy Instead

3 Reasons to Sell FUBO and 1 Stock to Buy Instead

Kayode Omotosho

Thu, February 26, 2026 at 10:23 PM GMT+9 3 min read

In this article:

FUBO

+1.72%

Shareholders of fuboTV would probably like to forget the past six months even happened. The stock dropped 65.9% and now trades at $1.18. This might have investors contemplating their next move.

Is there a buying opportunity in fuboTV, or does it present a risk to your portfolio? See what our analysts have to say in our full research report, it’s free.

Why Do We Think fuboTV Will Underperform?

Despite the more favorable entry price, we don’t have much confidence in fuboTV. Here are three reasons we avoid FUBO and a stock we’d rather own.

1. Weak Growth in Domestic Subscribers Points to Soft Demand

Revenue growth can be broken down into changes in price and volume (for companies like fuboTV, our preferred volume metric is domestic subscribers). While both are important, the latter is the most critical to analyze because prices have a ceiling.

fuboTV’s domestic subscribers came in at 6.2 million in the latest quarter, and over the last two years, averaged 48.8% year-on-year growth. This performance was underwhelming and suggests it might have to lower prices or invest in product improvements to accelerate growth, factors that can hinder near-term profitability.

fuboTV Domestic Subscribers

2. Operating Losses Sound the Alarms

Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes.

fuboTV’s operating margin has been trending up over the last 12 months, but it still averaged negative 6.2% over the last two years. This is due to its large expense base and inefficient cost structure.

fuboTV Trailing 12-Month Operating Margin (GAAP)

3. Cash Burn Ignites Concerns

Free cash flow isn’t a prominently featured metric in company financials and earnings releases, but we think it’s telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.

Over the last two years, fuboTV’s demanding reinvestments to stay relevant have drained its resources, putting it in a pinch and limiting its ability to return capital to investors. Its free cash flow margin averaged negative 4%, meaning it lit $4.03 of cash on fire for every $100 in revenue.

fuboTV Trailing 12-Month Free Cash Flow Margin

Final Judgment

fuboTV falls short of our quality standards. Following the recent decline, the stock trades at 1.2× forward EV-to-EBITDA (or $1.18 per share). While this valuation is optically cheap, the potential downside is huge given its shaky fundamentals. There are more exciting stocks to buy at the moment. We’d suggest looking at an all-weather company that owns household favorite Taco Bell.

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