Full Answer
Is Skillz’s share price down 70%?
Since hitting a high of more than $46 this year, Skillz has seen its share price drop nearly 70%. Today, it appears a short report issued by Eagle Eye Research is the latest downside development for this stock. This report was tweeted by an anonymous user from what appears to be a new account.
Is Skillz round-tripping its revenues?
The short-seller alleges bonus cash is a non-cash expense for the company, but the cash liability to players is real. Accordingly, the short-seller views this model as unsustainable. Furthermore, the short-seller alleges Skillz is round-tripping its revenues.
Why is Skillz being shorted by short sellers?
The short-seller believes Skillz is misrepresenting the company’s true financial condition. Accordingly, attention is being paid to the company’s “bonus cash” awards. The short-seller alleges bonus cash is a non-cash expense for the company, but the cash liability to players is real. Accordingly, the short-seller views this model as unsustainable.
Why has SKLZ stock dropped?
However, Skillz was forced to spend heavily to attract and retain those users. The company's sales and marketing expenses surged 95% to $155 million, outpacing its revenue by a startling 42%. Skillz's stock price fell sharply on Thursday. Image source: Getty Images.
Is SKLZ losing money?
Skillz (NYSE:SKLZ) has slipped 7% postmarket after its Q1 earnings showed a wider net loss that was worse than analysts expected.
Is SKLZ stock a buy?
The financial health and growth prospects of SKLZ, demonstrate its potential to underperform the market. It currently has a Growth Score of D. Recent price changes and earnings estimate revisions indicate this would not be a good stock for momentum investors with a Momentum Score of F.
Is SKLZ undervalued?
Is SKLZ stock undervalued or overvalued? Compared to the current market price of 1.22 USD, Skillz Inc is Undervalued by 62%.
Is Sklz a meme stock?
This gaming company was a meme stock, but can it succeed over the long run? Mobile gaming company Skillz (SKLZ 6.57%) has ridden the meme stock roller coaster in 2021 as the number of shares shorted rose to nearly 61 million at the end of August, representing 15% of the shares outstanding.
What is the future of SKLZ?
Skillz Inc (NYSE:SKLZ) The 7 analysts offering 12-month price forecasts for Skillz Inc have a median target of 3.00, with a high estimate of 5.00 and a low estimate of 1.55. The median estimate represents a +145.90% increase from the last price of 1.22.
Does SKLZ stock have a future?
Skillz still has a market cap of about $1 billion, or 2.5 times its estimated revenue for 2022, after its post-earnings plunge. That price-to-sales ratio might be low for a company that generates double-digit percentage sales growth, but Skillz just told investors to expect low single-digit growth this year.
Is SKLZ overvalued?
Skillz Inc has a current Real Value of $1.2 per share. The regular price of the company is $1.25. Today, the company appears to be overvalued....0.96.LowNext ValueHigh0.0294381.478.43
How much debt is SKLZ?
$300 millionSkillz has $743 million in cash and short-term investments at the end of 2021, but it also has $300 million in debt at a 10.25% interest rate. So in reality, the company has $443 million in funds, and the interest on that debt will virtually eat up the savings from cutting back its engagement spending.
The company reported a wider-than-expected loss per share for the second quarter
A Fool since 2019, and a graduate of Cal State LA with a B.S. in Finance and M.A. in Economics. Parkev is an adjunct professor of Finance and enjoys reading about financial and economic history. You'll often find him writing about stocks in the consumer goods and technology sectors.
Key Points
Rising customer acquisition costs were the main driver of the wider earnings loss.
Second-quarter developments
In the first quarter, Skillz, which allows users on its platform to compete in various mobile game competitions, reported a loss per share of $0.21. Analysts on Wall Street expected a $0.09 loss. That larger-than-expected loss spooked investors. But the bigger loss was due to an increase in user acquisition costs.
Was Skillz's stock price drop justified?
There was certainly good reason for the stock price to fall following second-quarter earnings. The company reported a loss per share that was larger than anticipated, and it indicated one of its major costs is increasing. However, that does not mean the stock price drop is not an opportunity for long-term investors.
When did Skillz start sliding?
Some high-growth stocks like Skillz started sliding in mid-March. But on March 17, the company announced a stock offering that didn't sit well with investors for three reasons. First, certain undisclosed shareholders sold 17 million shares, which makes it look like they've lost confidence in Skillz.
How much is Skillz worth in 2021?
Management is guiding for full-year revenue of $366 million in 2021, up 59% from 2020.
Is Skillz a disaster?
Wolfpack Research believes Skillz is a soon-to-be "spactacular disaster," according to the short report it published on March 8. The firm alleges Skillz management, at best, is overhyping a deal with the National Football League (NFL). At worst, the report suggests the deal could even be made up.
Serious Risks with SKLZ Stock
The senior notes will cost Skillz an interest rate of 10.25%. This is a red flag. The leading mobile game platform business does not make enough sales to offset costs.
Aarki Acquisition
In June, Skillz announced its plan to buy San Francisco-based Aarki to form an integrated esports advertising platform.
Opportunity
Trivia Crack is the No. 1 trivia game in the world with 40 million monthly active users. Skillz will offer a live tournament-style play on its platform. Speculators are not so bullish on mobile gaming firms based on active user count only. The stock tried to rally in the latter half of 2020 only to trend lower.
Fair Value of SKLZ Stock
Wall Street analysts have a price target ranging from $12 to $25, according to Tipranks. At an average price target of $18.60, investors should not assume analysts have a high conviction on the implied 150% upside. Most analysts set the price target two months ago or longer.
Too Many Promises
Momentum investors gave up on Skillz in recent weeks. They sold the stock to realize losses to offset gains in other holdings. Skillz is investing too heavily to chase growth, creating quarterly losses. Still, the firm has strong MAUs.