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Skillz (SKLZ)
NYSE:SKLZ
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Skillz
(NYSE:SKLZ)
52Neutral
Positive Factors
Patent Settlements
Incremental settlements in patent infringement lawsuits have helped fund product development initiatives, and management believes successful litigation could lead to a significant unlock in monthly active user expansion.
User Growth
There has been a third consecutive quarter of stability in the paying user base with a 5% growth in overall monthly active users.
Negative Factors
Revenue Decline
Revenue and GMV are both still declining at a greater than 30% year-over-year pace.
Skillz (SKLZ) vs. S&P 500 (SPY)
Market Cap
$96.15M
Dividend YieldN/A
Average Volume (3M)72.02K
Price to Earnings (P/E)―
Beta (1Y)2.38
Revenue Growth-37.90%
EPS Growth80.16%
CountryUS
Employees225
SectorCommunication Services
Sector Strength82
IndustryInteractive Multi-Media
Share Statistics
EPS (TTM)-2.25
Shares Outstanding14,438,426
10 Day Avg. Volume71,543
30 Day Avg. Volume72,016
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.91
Price to Cash Flow (P/CF)-2.20
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$10.50Price Target Upside94.81% Upside
Rating ConsensusHold
Number of Analyst Covering0
Skillz Business Overview & Revenue Model
Company DescriptionFounded in 2012, Skillz operates as a marketplace that connects mobile game players worldwide and provides a competitive gaming experience. The company leverages its platform to host casual eSports tournaments.
How the Company Makes MoneySkillz Inc. generates revenue primarily through entry fees from players participating in skill-based games and tournaments on its platform. A portion of these fees is distributed as prizes, while the remainder is retained by Skillz and shared with the game developers. The company also earns money through partnerships with developers, who utilize Skillz's platform to increase the reach and monetization of their games. Additionally, Skillz may generate revenue from sponsorships and advertising on its platform, although the primary focus remains on facilitating paid competitions and sharing the revenue with content creators.
Skillz Financial Statement Overview
Summary
Skillz faces significant financial challenges, including declining revenues and persistent losses, affecting its profitability. While the company maintains a stable debt position, ongoing losses and negative cash flows pose risks. The high gross profit margin is a positive aspect, but strategic improvements are needed to achieve sustainable growth and profitability.Income Statement
Skillz's income statement shows declining revenue with a TTM (Trailing-Twelve-Months) revenue of $104.2M, down from $152.1M in 2023. The gross profit margin remains high at 86.9%, indicating efficient cost management. However, the company suffers from negative net and EBIT margins due to high operating expenses, resulting in a significant net loss over the years.45
Neutral
Balance Sheet
The balance sheet reflects moderate financial health with a debt-to-equity ratio of 0.69, suggesting a balanced leverage position. The equity ratio stands at 51.1%, indicating a substantial portion of assets funded by equity. However, the declining stockholders' equity signals potential risks if losses continue.50
Neutral
Cash Flow
Cash flow analysis reveals challenges with negative free cash flow in recent periods, although there was a slight improvement in operating cash flow. The operating cash flow to net income ratio is positive in TTM, but free cash flow remains negative, indicating ongoing cash burn issues.40
Negative
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 104.23M | 152.08M | 269.71M | 384.09M | 230.12M | 119.87M | Gross Profit |
| 90.61M | 136.70M | 238.99M | 359.38M | 217.83M | 114.16M | EBIT |
| -90.88M | -114.29M | -253.31M | -287.12M | -99.62M | -24.83M | EBITDA |
| -88.18M | -96.31M | -402.04M | -194.18M | -142.46M | -20.40M | Net Income Common Stockholders |
| -42.60M | -101.36M | -438.88M | -181.38M | -122.46M | -29.82M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 25.63M | 302.03M | 489.78M | 560.39M | 262.73M | 25.63M | Total Assets |
| 38.86M | 395.83M | 621.29M | 1.02B | 282.42M | 38.86M | Total Debt |
| 9.63M | 136.70M | 286.86M | 294.57M | 0.00 | 9.63M | Net Debt |
| -16.00M | -165.32M | -75.66M | 53.23M | -262.73M | -16.00M | Total Liabilities |
| 20.19M | 185.34M | 342.89M | 399.13M | 47.40M | 20.19M | Stockholders Equity |
| 18.66M | 210.49M | 278.40M | 623.70M | 235.02M | 18.66M |
| Cash Flow | Free Cash Flow | ||||
| -184.00K | -84.99M | -181.49M | -183.39M | -59.48M | -25.16M | Operating Cash Flow |
| 2.29M | -71.76M | -179.60M | -180.15M | -56.23M | -21.94M | Investing Cash Flow |
| 4.38M | 168.30M | 311.39M | -643.92M | -3.25M | -3.22M | Financing Cash Flow |
| -28.30M | -149.95M | -10.61M | 802.68M | 296.58M | 31.17M |
Skillz Technical Analysis
Negative
5.39
Price Trends
5.93
Negative
5.62
Negative
5.94
Negative
Market Momentum
-0.25
Positive
37.90
Neutral
21.05
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SKLZ, the sentiment is Negative. The current price of 5.39 is below the 20-day moving average (MA) of 5.76, below the 50-day MA of 5.93, and below the 200-day MA of 5.94, indicating a bearish trend. The MACD of -0.25 indicates Positive momentum. The RSI at 37.90 is Neutral, neither overbought nor oversold. The STOCH value of 21.05 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SKLZ.
Skillz Risk Analysis
Skillz disclosed 49 risk factors in its most recent earnings report. Skillz reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Skillz Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
66 Neutral | $35.93B | 35.73 | 14.04% | 0.55% | -2.99% | -0.46% | |
63 Neutral | $10.17B | ― | -5.37% | ― | 18.03% | 82.15% | |
62 Neutral | $35.97B | ― | -51.45% | ― | 1.00% | -148.89% | |
59 Neutral | $29.20B | 0.14 | -12.92% | 4.06% | 2.18% | -51.74% | |
52 Neutral | $96.15M | ― | -19.96% | ― | -37.90% | 80.16% | |
47 Neutral | $81.13M | ― | -147.16% | ― | -13.78% | -5297.96% |
* Communication Services Sector Average
Performance Comparison
SKLZ
Skillz
5.11
-1.29
-20.16%
EA
Electronic Arts
137.72
3.41
2.54%
TTWO
Take-Two
203.63
59.86
41.64%
CHGG
Chegg
0.78
-7.09
-90.09%
ROKU
Roku
67.63
2.97
4.59%
Skillz Earnings Call Summary
Earnings Call Date: Mar 13, 2025 | % Change Since: 5.48% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a company in transition. While legal actions and improved financial metrics indicate positive steps, the significant revenue decline and challenges in user conversion are concerning. However, the company's strong cash position and stabilization of paying users provide a foundation for potential recovery.Highlights
Legal Action Against Bot Companies
Skillz has filed lawsuits against companies like Papaya Games and Voodoo Games to protect stakeholders and ensure fairness in the gaming industry. This highlights their commitment to fair play and has also brought media attention to the issue.
Stabilization of Paying Users
Paying MAU stabilized at 121,000 in Q3 2024, showing consistent performance across the last three quarters.
Improved Financial Metrics
Adjusted EBITDA loss improved to $13.9 million in Q3 2024 from $18.5 million in Q3 2023, showing a 25% improvement year-over-year. Net loss also decreased to $21 million from $34 million in Q3 2023.
Strong Cash Position
Skillz ended Q3 with cash, cash equivalents, and restricted cash of $311 million, providing a strong runway for future growth.
Lowlights
Revenue Decline
Revenue was flat sequentially at $25 million and down 33% year-over-year, indicating challenges in achieving top-line growth.
Decreased Paid User Conversion Rate
The paid user conversion rate fell from 15% in Q2 to 14% in Q3, suggesting a slight decline in user monetization effectiveness.
Company Guidance
During the Skillz Inc. Q3 2024 earnings call, management provided guidance highlighting several key metrics. The company reported a paying monthly active user (MAU) count of 121,000, slightly down from 122,000 in the previous quarter, which reflects stability in user engagement. Revenue stood at $25 million, marking a 33% year-over-year decrease. The company's adjusted EBITDA loss improved to $13.9 million from $18.5 million in Q3 2023, with a negative margin of 57%. Legal expenses related to lawsuits against bot companies impacted this figure, as excluding these, the loss would have been $12.3 million. Operating cash flow was negative $11 million, aligning with the adjusted EBITDA. Skillz ended the quarter with $311 million in cash and equivalents, or $182 million net of debt. The company reiterated its focus on achieving positive adjusted EBITDA by 2025, supported by ongoing strategies across its four key pillars.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.