FuboTV (NYSE:FUBO) investors are off to a flying start in 2025, with the stock already up around 333% over the past week. The surge follows a major announcement that has bolstered the sports-focused streamer’s position.
The key deal involves FuboTV and Disney merging Disney’s Hulu + Live TV business with FuboTV, creating a new partnership to serve over 6.2 million customers across North America. The agreement is expected to close within 12-18 months’ time.
Under the terms of the deal, FuboTV will be led by its current management team, with Disney holding a 70% controlling stake. As part of the agreement, FuboTV will settle outstanding legal disputes with Disney and ESPN related to Venu Sports, as well as litigation with Fox and Warner Bros. Discovery.
To finalize these deals, Disney, Fox, and Warner Bros. Discovery will collectively pay FUBO $220 million, with Disney also agreeing to provide a $145 million term loan to FUBO in 2026.
The deal includes a new carriage agreement, under which FuboTV will develop a sports and broadcast service featuring Disney’s networks, including ABC, ESPN, ESPN2, ESPNU, SECN, ACCN, ESPNEWS, and ESPN+. This integration will also include ESPN+.
Analyst Darren Aftahi from Roth MKM sees the announcement as a significant boost for FUBO, making it one of the largest vMVPD operators and removing several risks that have weighed on shares. He expects FuboTV to benefit from economies of scale and improved negotiating power, although advertising remains its “Achilles heel.”
If FUBO effectively leverages the economies of scale offered by the merger, Aftahi believes it could command a higher valuation multiple in the future. With reduced cash burn and a new term loan, he expects the shares to benefit from increased subscriber growth and retention metrics, alongside margin expansion.
Despite this optimism, Aftahi remains neutral with a price target now set at $4.75, which suggests the stock is overvalued by 13%. The overall consensus rating among Wall Street analysts stands at Hold (i.e., Neutral), with an average target of $3.91 and an implied valuation that has overshot by 28%.
Source: https://www.tipranks.com/news/fubotv-stock-is-already-up-333-this-year-how-much-higher-can-it-go