New York-headquartered FuboTV (NYSE:FUBO) is a sports-focused streaming and wagering company. FUBO stock shot to the moon not long ago, but this probably is not sustainable.

FuboTV’s capital position is deeply negative. So, even when FuboTV’s management sets sky-high financial objectives, investors can stay grounded and ignore the hype.

Let’s not mince words here. It’s a tough time to try to operate sports betting business. As inflation soared this year, FuboTV became the poster child of 2021’s growth plays gone wrong.

Still, this hasn’t stopped FuboTV’s management from setting “bold targets,” as one analyst politely put it. Check FuboTV’s capital position and you’ll likely find, however, that the company’s lofty future goals don’t justify investor interest today.

What Happened to FUBO Stock?

Since FUBO stock is still essentially a meme stock, it’s prone to wild price moves regardless of FuboTV’s fundamentals. For instance, the company’s shares closed up 45% on Aug. 17 even though a Wedbush analyst had just downgraded the shares.

It’s difficult to prove this, but it sounds like meme stock traders were trying to make a quick buck. Folks who followed them into the abyss were soon punished, though, as FuboTV shares coughed up those ill-gotten mid-August gains by early September.

Circling back to the “bold targets” quote, it came from Wedbush analyst Michael Pachter. He warned that the company needed to raise capital and reduce cash burn or “it will be out of cash within a year.”

Overeager traders temporarily bid up FUBO stock despite Pachter’s dire prediction. The analyst also said he wasn’t certain how dilutive any capital gain raise would be and worried about how loon they would take to reduce capital burn.

FuboTV Won’t Be Cash Flow Positive for a While

Pachter’s comments apparently refer to comments made by FuboTV’s management, which can be reviewed in the company’s second-quarter 2022 shareholder letter. In that letter, the company’s management stated FuboTV’s intention attain positive cash flow by 2025.

In other words, don’t expect FuboTV to be cash flow positive for several years, at least. This, along with Pachter’s concern about FuboTV diluting its shares through capital-raising efforts, should be off-putting to prospective FUBO stock investors.

Meanwhile, Evercore analyst Shweta Khajuria observed that FuboTV’s management expects to achieve not only positive free cash flow, but also positive adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA, by 2025. Let’s see how the company is doing in 2022, though.

FuboTV’s shareholder letter reveals that the company’s adjusted EBITDA was an already worrisome -$47.4 million in 2021’s second quarter. That financial hole deepened substantially to -$79.1 million in Q2 of 2022.

Now, let’s talk about cash flow, since FuboTV’s management seemed so eager to discuss this topic. Actually, we can let the folks at FuboTV speak for themselves:

“Operating cash flow in [Q2 2022] was negative $91.3 million, including $7.7 million operating cash outflow associated with the wagering business. This represented a $35.3 sequential reduction in operating cash flow.”

FUBO Stock Isn’t Worth Gambling On

FuboTV’s management is free to engage in wishful thinking if they want to do so. This shouldn’t instill prospective investors with a false sense of hope, however.

Sure, FUBO stock might get a boost from meme stock traders sometimes. Consider whether the sharp rallies are based on firm fundamentals, though, and whether they’re sustainable. All in all, investing in FuboTV now is a pure gamble based on hope and hype rather than hard financial facts.

On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.