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J.P. Morgan (NYSE:JPM) cut its rating on streaming service fuboTV (NYSE:FUBO), citing concerns over the sustainability of its long-term business model. The downgrade comes as a surprise considering how the platform generated explosive growth numbers in its first-quarter report.

Due to apprehensions surrounding its path to profitability and business model, J.P. Morgan analyst Philip Cusick assigned an underweight rating to FUBO stock. Moreover, he questions the enterprise’s ability to navigate a tricky period for streaming businesses. He also expressed doubts over its sportsbook offering and potential liquidity and solvency troubles.

The company generated a massive $242 million in sales in the first quarter. This represents a huge 102% bump from the prior-year quarter. Also, after the quarter, the streaming platform grew to pay subscribers by a 78% increase from last year.

However, the company’s main concerns relate to the growing losses on its bottom line. It posted a hefty net loss of $141 million for the quarter, more than double the first quarter of last year. Additionally, the firm shows hardly any indications of leverage on the expenses side.

Its management points to a robust balance sheet with $456 million in cash despite the losses. Chief Executive Officer David Gandler believes its cash till provides enough flexibility through 2023. Additionally, the firm targets positive adjusted EBITDA and cash flows in 2025. The enterprise can focus on key growth areas and explore new ways to diversify income streams with positive cash flows.

FUBO stock has taken quite a beating in the stock market, trading under 0.7 times forward sales estimates. Hence, it’s ideal for loading up on the streaming platform with such immense long-term potential.

On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines

Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.