Can FuboTV Stock Triple Again in 2025?

You don't have to look hard to find Monday's top performer among U.S. exchange-listed stocks. Shares of FuboTV (NYSE: FUBO) more than tripled on the trading day, soaring 251% after the streaming TV service operator struck a head-turning deal with Disney (NYSE: DIS). Can it triple again from here?

This week's jump was warranted. Fubo went from a fringe but growing digital platform to one with Disney as a majority shareholder. The House of Mouse now has a 70% stake in Fubo, contributing its Hulu + Live TV streaming service to Fubo's live TV platform anchored by sports programming.

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The thrill of victory

The unlikely pairing isn't as perplexing once you consider the backstory. Disney was set to partner with a pair of sports media giants to launch Venu Sports in the fall of last year, creating the ultimate sports package. Fans would pay a steep $42.99 a month for access to the impressive collection of live sports programming:

• Disney would contribute all of the ESPN variations as well as ABC and the collegiate sports hotbeds of SECN and ACCN.
• Fox would contribute its namesake network as well as FS1, FS2, and its own regional college sports channel, BTN, which covers the Big Ten.
• Warner Bros. Discovery brought TNT, TBS, and TruTV to the programming table.

Commanding the lion's share of the domestic-sports-viewing market, Venu was set to dominate. It didn't seem to matter that the top streaming on-demand services are also gobbling up rights for live sports. Venu was going to be an essential subscription for any enthusiast with the means to foot the subscription fee.

Fubo crashed the party this past summer. It sued, scoring an injunction against the new sports package. It took Venu off the menu of college sports fans hoping for a one-stop shop for the 2024 NCAA football season. Disney had to do something, and it didn't want to deal with a prolonged legal battle -- one it might not win.

Striking a deal with Fubo to settle the litigation made sense. Now Disney has contributed its live TV streaming platform for a majority stake in what was a speculative penny stock before this week.

Image source: Getty Images.

The agony of defeat

For Fubo investors, it's hard not to feel bullish. The stock hit another two-year high on Tuesday morning. Everyone's talking about Fubo -- in a good way, for a change. However, there has to be a sense that Disney's heart isn't in the peace offering it just made.

It's important to remember that this deal gives Fubo only the Hulu + Live TV streaming service, not the stand-alone Hulu on-demand service with 47.7 million subscribers or Disney+ with 122.7 million accounts worldwide. Fubo and its 1.6 million premium accounts is gaining Hulu + Live TV with its 4.6 million subscribers. The share count will more than triple for Disney to receive its 70% stake.

Live TV streaming services are a tiny slice of the overall direct-to-consumer market. There were just 18 million subscribers across all the leading domestic services a year ago. It's also not a high-margin business. Unlike Disney+ or Hulu, where the media stock giant has control over programming costs, live TV platforms must pay rising licensing costs to carry all the popular third-party networks. What if Disney is just dumping its Hulu + Live TV streaming service? Isn't the launch of Venu going to crush the live TV streaming market anyway? This niche market consists mainly of sports fans trying to duplicate cable and satellite television offerings before they cut the cord. Now they will just grab Venu and a cheaper streaming service or two.

But Fubo will likely see an increase in subscribers given its newfound exposure, and this was a year when the platform was set to generate positive free cash flow even before this week's credibility boost. Despite Disney's universal appeal, it was able to collect only a bit less than three times the audience for its live TV product. Now imagine that product owned by a company laser-focused on making live TV streaming work. And Fubo's share count will more than triple now, but the float will likely remain the same unless Disney decides to unload its stake. In short, good news will continue to squeeze the shorts and send the stock higher.

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Rick Munarriz has positions in Walt Disney. The Motley Fool has positions in and recommends Walt Disney, Warner Bros. Discovery, and fuboTV. The Motley Fool has a disclosure policy.