FuboTV’s shares fell by more than 17% on Friday premarket after it cut its NA revenues outlook for the year.

FUBO reported a loss of $105.5million in Q1 adjusted EBITDA. This is an increase from the $46.5 million loss recorded during the previous year. Analysts were anticipating a loss of $68.2million. It came in at $242million in this period, down from $119.7million in the prior year and consistent with expectations of $243million.

FUBO anticipates Q2 revenue from NA to be between $220 million and $225 million. The Rest of World revenue will range from $5 million to $6million. The number of NA subscribers for Q2 is expected to be between 960,000 and 975,000. For the rest of the world, the estimate ranges from 300,000. to 310,000.

FuboTV projects that NA revenues for the year will range from $1.02 billion – $1.03billion, down slightly from $1.08billion – $1.09billion. FuboTV expects the Rest of World revenues to be between $20 and $25 millions for the entire year, an increase from its prior forecast of $15 million-20 million.

For the entire fiscal year, the number of NA subscribers is expected to be between 1.47 million and 1.49 million. This compares to the 1.50 million-1.51 million guidance. From the 270,000-280,000 forecast, the number of subscribers to the Rest of World will be 300,000. To 310,000.

“In a less robust advertising market, however, we experienced some pressure on adjusted contribution margin due to slower ad sales growth than we had initially expected, with ad revenue up 81% year-over-year,” the company said in a statement.

JPMorgan analyst Philip Cusick downgraded to Underweight from Neutral as “long-term business model questions remain in focus.”

“Our downgrade is driven by questions about: 1) the company’s long-term business model and path to profitability; 2) the viability of FUBO’s burgeoning sportsbook given heightened competition in the space; and 3) medium-term liquidity and solvency as the company burns cash and the ATM share sale avenue is closed by the falloff in the stock. Despite the sizable sell-off year-to-date, we remain skeptical of FUBO’s path to cash flow in an increasingly challenging streaming environment given the company’s limited operating leverage vis-à-vis this peer group,” Cusick said in a client note.

Roth Capital analyst Darren Aftahi decided to downgrade from Buy to Neutral with a new target price of $4.25 per shares (down from $7.50). Key pillar in the downgraded thesis’s assertion is that better advertising is still needed to offset the subscription base cost.

“We are moving to the sidelines, downgrading shares to Neutral from Buy as we wait to see a tangible path to profitability with an ad business performing below expectations and a consistent need to spend for sub acquisition and to maintain that base. While its $456M in cash ($204M raised via ATM in 1Q at ~$7.52) is expected to get FUBO to year-end 2023, it still requires additional financing in FY24 (potentially sooner if subscriber costs aren’t offset by a faster ramp in ad ARPU),” Aftahi wrote in a client note.

By Senad Karaahmetovic