$0.00
$13.00
bear $0.00
base $8.50
bull $13.00
margin of safety $3.50
market price* $8.00
Business condition attached to the margin of safety
A full audited fiscal year of the combined company showing cash from operations that stays positive after the roughly $527 million receivables build seen in the nine months to June 2026 has either reversed or been explained as timing, and at least two further quarters confirming owner earnings near the level used in the base case.
Fubo is a US subscription streaming service that delivers live television, with a heavy sports focus, over the internet. Following the combination with the Hulu + Live TV service (the deal terms are described in the company's 2024 annual report), the company now reports as a much larger business. In the nine months ended June 30, 2026 it booked about $4.60 billion of revenue, roughly $6 billion a year, against about $1.0 billion of revenue for Fubo alone in 2024 (roughly $1.6 billion in 2024). The reporting history of the combined company is short, so this valuation rests on limited evidence and is best read as a wide range. What the numbers show. Before the combination Fubo lost money every year: cash from operations was negative $149 million (2020), $196 million (2021), $317 million (2022), $178 million (2023) and $79 million (2024), and after deducting stock compensation of $42 to $53 million a year and removing working-capital swings, per-share owner earnings were negative in every one of those years (about -$4.39, -$2.39, -$2.23, -$0.94 and -$0.54). Those years describe a different, much smaller business, so they are not used as the earnings level for today's company. For the nine months to June 30, 2026, the combined company reported a small net loss of $16.3 million after $95.4 million of non-cash amortization of acquired intangibles and $32.4 million of stock compensation. Cash from operations, however, was negative $417.1 million, almost entirely because receivables grew by $526.5 million. Setting that working-capital movement aside, as our method does, and deducting stock compensation and $1.1 million of capital spending, the nine-month owner earnings come to roughly $33 million, about $1.06 per diluted share (31.1 million shares), or roughly $1.4 a year if that pace holds. We were not able to retrieve the narrative of the filing that explains the receivables build, so we cannot confirm whether it is timing that will reverse or a lasting cash drain. This is the single largest open question, and the valuation below does not credit the reversal as a gain. Earnings level and growth. The only post-combination observation is these nine months, so the base case uses about $1.4 per share a year as the starting point, and we treat it as tentative. Growth credited: none. The trailing full-year figure (2024, Fubo alone) was negative $0.54 per share and is not comparable, so the base case does not assume a rebound from it; year one is set below flat. We left out subscriber growth, price increases, cost savings from combining the two services and any margin expansion because none is contracted or backed by a multi-year record for this business. Because the company is carrying large acquired-intangible amortization, which reflects assets such as subscriber relationships that wear out, we let earnings fade instead of holding them flat. The amortization is added back as a non-cash charge, as it should be, and the wear-out is reflected in the shrinking earnings path rather than by lowering the starting level. Base case, about $8.50 per share. Owner earnings of about $1.4 per share, declining about 3% a year for ten years, with nothing assumed to continue beyond year ten because no contract or track record supports it.
Bear case, $0. The reported cash burn is real money that left the business, and if the receivables build reflects a lasting drain rather than timing, and earnings fall further from a subscription video business with an operating loss of $56 million in the nine months, the shares would be worth nothing on this method; we do not add balance-sheet cash or subtract debt, so we show $0 rather than a negative number.
Bull case, about $13 per share. Owner earnings hold at about $1.4 for roughly fifteen years, which assumes the subscriber base does not erode and the nine-month result proves to be a sustainable level. What would make this wrong. Upside: the receivables build proves to be timing and the underlying earnings prove larger than nine months suggest. Downside: the receivables build is a permanent use of cash, or earnings in the coming quarters fall short of this pace. The combined company has only about three quarters of reported history, so estimates could move materially as more results are filed. The margin-of-safety price is about $3.50 per share and applies only once the business condition noted is met, because the range of outcomes is wide, the only evidence is one nine-month period, and the low case is zero.