Why FuboTV Stock Soared 132% in Q1 While the S&P 500 Had Its Worst Quarter Since 2022

In contrast with the S&P 500 index's worst quarterly performance since the bear market of early 2022, share prices of streaming television service FuboTV (NYSE: FUBO) rose 132% in Q1. This strength turns heads, particularly when the overall market struggles.

But a deeper dive on FuboTV stock's big move suggests it's considerably less compelling.

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The bullishness didn't last

Early this year, Walt Disney announced it would merge its Hulu streaming brand with FuboTV's streaming cable TV operation. That's why FuboTV stock soared 251% the day the companies announced the pairing.

It's a reasonably good fit and an apparent win for both companies. Disney is now a 70% shareholder of the newly combined entity, but the entertainment media giant spins off a relatively small and fiscally complicated streaming platform. Meanwhile, Fubo gets a well-recognized name brand, adds to its prospective reach, and bolsters its total scale (it now has 6 million-plus paying streaming subscribers between the two services).

Problem? Much of that gain has since been given back as investors studied details of the deal. The price correction may not be over yet, either.

Insurmountable challenges remain

While the union of Hulu and Fubo technically makes it one of the nation's bigger virtual multichannel video programming distributors (vMVPDs), this alternative to traditional cable TV still faces a basic challenge: relevancy.

Although streaming cable is generally cheaper than conventional cable TV, consumers are still decreasingly interested in any kind of cable television offerings at almost any sustainable price. That's why industry research outfit AlixPartners believes "2025 will mark the peak of vMVPDs before entering a period of [customer] decline" stemming from "the rapid shift of live sports to DTC platforms like ESPN's flagship service, coupled with changing consumer preferences and rising costs."

Given the reasons for the ongoing demise of conventional cable TV -- like on-demand streaming and the revival of interest in aerial television broadcasts -- it makes sense that virtual cable television players may also be fighting what's ultimately a losing battle.

Don't be too enamored by FuboTV stock's early Q1 heroics. The persistent pullback since then tells the real tale.

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James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Walt Disney and fuboTV. The Motley Fool recommends Comcast. The Motley Fool has a disclosure policy.