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Skillz (SKLZ)
NYSE:SKLZ
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Skillz
(NYSE:SKLZ)
Rating:57Neutral
Price Target:
$7.50
▲(4.02%Upside)
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 Base 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
EBITDA Challenges
Until Skillz delivers more material top-line growth, there is reluctance to commit to positive adjusted EBITDA in any of the next ten quarters.
Revenue Decline
Revenue and GMV are both still declining at a greater than 30% year-over-year pace.
Skillz (SKLZ) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$132.36M
Dividend YieldN/A
Average Volume (3M)48.14K
Price to Earnings (P/E)―
Beta (1Y)2.00
Revenue Growth-29.26%
EPS Growth57.78%
CountryUS
Employees225
SectorCommunication Services
Sector Strength83
IndustryElectronic Gaming & Multimedia
Share Statistics
EPS (TTM)-0.92
Shares Outstanding14,438,426
10 Day Avg. Volume49,260
30 Day Avg. Volume48,144
Financial Highlights & Ratios
PEG Ratio>-0.01
Price to Book (P/B)0.75
Price to Sales (P/S)0.00
P/FCF Ratio-1.14
Enterprise Value/Market Cap1.00
Enterprise Value/Revenue0.32
Enterprise Value/Gross Profit1.66
Enterprise Value/Ebitda-0.37
Forecast
1Y Price Target
$15.00Price Target Upside108.04% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
Skillz Business Overview & Revenue Model
Company DescriptionSkillz Inc. is a technology company that operates in the mobile gaming industry. It offers a competitive gaming platform that connects players worldwide through competitive, multiplayer tournaments. The platform is designed to enhance the gaming experience by integrating social competition into mobile games, allowing players to compete for cash prizes and virtual rewards. Skillz partners with game developers to host tournaments, enabling them to engage and monetize their user bases effectively.
How the Company Makes MoneySkillz generates revenue primarily through its platform fees, which are a percentage of the entry fees from the tournaments held on its platform. Players pay entry fees to participate in cash-prize tournaments, and Skillz takes a cut of these fees as its revenue. Additionally, the company collaborates with game developers, sharing the entry fee revenue while providing them with a platform to attract and engage users. Significant partnerships with developers enhance Skillz's game offerings and user engagement, further driving its revenue. The company also earns from in-app purchases and advertising within its gaming ecosystem.
Skillz Earnings Call Summary
Earnings Call Date:May 08, 2025
(Q1-2025)
| % Change Since: 36.55%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted positive sequential revenue growth and improvements in key metrics like user conversion rates and net loss reduction. However, it also revealed challenges such as year-over-year revenue decline, compliance issues with the NYSE, and ongoing litigation with competitors. The sentiment is mixed with both significant achievements and considerable challenges.Q1-2025 Updates
Positive Updates
Sequential Revenue Growth
Revenue for Q1 was $22 million, reflecting a 21% increase sequentially from the previous quarter.
Improved Paying User Conversion Rate
The paying user conversion rate increased to 16.2% in Q1 from 14.6% in Q4 2024.
Significant Reduction in Net Loss
Net loss for Q1 was $15 million, compared to a net loss of $27 million in the prior year.
Strong Cash Position
Ended Q1 with $264 million in cash, including a $7.5 million payment received from AviaGames as part of a settlement.
Negative Updates
Year-over-Year Revenue Decline
Revenue decreased by 11% year-over-year.
Ongoing Compliance Issues
The company is not in compliance with NYSE listing standards and has delayed filing its Form 10-K.
Litigation Challenges
Ongoing lawsuits against Papaya and Voodoo due to alleged unfair practices and use of bots, which have impacted business.
Company Guidance
In the Skillz, Inc. 2025 First Quarter Results Call, guidance highlighted several key financial metrics and strategic initiatives. Revenue for the quarter was reported at $22 million, reflecting a 21% sequential increase but an 11% decline year-over-year. The company achieved a paid user conversion rate of 16.2%, up from 14.6% in the previous quarter. Research and development expenses stood at $5 million, marking a 4% increase year-over-year, while sales and marketing expenses decreased by 9% year-over-year to $19 million. General and administrative expenses were $16 million, down 29% year-over-year, and the adjusted EBITDA loss was reduced to $15 million from $19 million in the fourth quarter of 2024. Skillz ended the quarter with a strong balance sheet, holding $264 million in cash, including cash equivalents and restricted cash, and an outstanding debt principal of $129.7 million. The company emphasized its strategic focus on enhancing its platform, optimizing organizational structure, improving go-to-market strategies, and demonstrating a clear path to profitability, supported by a robust balance sheet and financial position.Skillz Financial Statement Overview
Summary
Skillz faces significant financial challenges, marked by declining revenues and persistent losses. Despite strong gross profit margins, the company struggles with profitability, negative cash flow, and a declining asset base. Low leverage is a positive aspect, but the need for improved cash generation and revenue growth is critical.Income Statement
Skillz's income statement shows significant challenges with profitability. The TTM (Trailing-Twelve-Months) gross profit margin is strong at about 86%, indicating efficient cost management relative to revenue. However, the net profit margin is deeply negative, reflecting persistent losses in operations. Revenue has been declining over recent periods, with a notable drop from $384 million in 2021 to $93 million TTM, highlighting a concerning trend in growth.45
Neutral
Balance Sheet
The balance sheet indicates moderate stability with a debt-to-equity ratio of approximately 0.07 TTM, showing low leverage. However, the equity ratio has been decreasing, with stockholders' equity declining alongside total assets, raising concerns about asset utilization and financial health. The return on equity is negative due to ongoing losses, underscoring profitability challenges.55
Neutral
Cash Flow
Skillz's cash flow statement reveals struggles with cash generation. The free cash flow is negative, and the free cash flow to net income ratio is unfavorable, showing inefficiencies in converting revenue into cash. Operating cash flow is also negative, which along with declining free cash flow growth, signals potential liquidity issues.50
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 92.64M | 95.47M | 152.08M | 269.71M | 384.09M | 230.12M |
| Gross Profit | 79.73M | 82.06M | 136.70M | 238.99M | 359.38M | 217.83M |
| EBITDA | -80.34M | -48.35M | -96.31M | -402.04M | -194.18M | -142.46M |
| Net Income | -36.44M | -48.23M | -101.36M | -438.88M | -181.38M | -122.46M |
Balance Sheet | ||||||
| Total Assets | 346.97M | 364.17M | 395.83M | 621.29M | 1.02B | 282.42M |
| Cash, Cash Equivalents and Short-Term Investments | 254.34M | 281.92M | 302.03M | 489.78M | 560.39M | 262.73M |
| Total Debt | 10.52M | 136.54M | 136.70M | 286.86M | 294.57M | 0.00 |
| Total Liabilities | 189.74M | 192.58M | 185.34M | 342.89M | 399.13M | 47.40M |
| Stockholders Equity | 157.23M | 171.59M | 210.49M | 278.40M | 623.70M | 235.02M |
Cash Flow | ||||||
| Free Cash Flow | -15.97M | -9.95M | -84.99M | -181.49M | -183.39M | -59.48M |
| Operating Cash Flow | -11.83M | -7.19M | -71.76M | -179.60M | -180.15M | -56.23M |
| Investing Cash Flow | -3.69M | -1.63M | 168.30M | 311.39M | -643.92M | -3.25M |
| Financing Cash Flow | -20.74M | -21.29M | -149.95M | -10.61M | 802.68M | 296.58M |
Skillz Technical Analysis
Positive
7.21
Price Trends
6.21
Positive
5.59
Positive
5.59
Positive
Market Momentum
0.32
Negative
66.49
Neutral
76.87
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SKLZ, the sentiment is Positive. The current price of 7.21 is above the 20-day moving average (MA) of 6.70, above the 50-day MA of 6.21, and above the 200-day MA of 5.59, indicating a bullish trend. The MACD of 0.32 indicates Negative momentum. The RSI at 66.49 is Neutral, neither overbought nor oversold. The STOCH value of 76.87 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
61 Neutral | $40.40B | -0.91 | -12.15% | 3.89% | 2.03% | -69.70% | |
58 Neutral | $73.69M | ― | 154.70% | ― | 11.43% | 26.78% | |
57 Neutral | $132.36M | ― | -21.26% | ― | -29.26% | 57.78% | |
52 Neutral | $15.08M | ― | -98.74% | ― | 0.31% | 27.47% | |
47 Neutral | $59.91M | ― | -16.65% | ― | 105.31% | 95.66% | |
46 Neutral | $27.67M | ― | -130.56% | ― | -26.11% | 57.68% | |
42 Neutral | $42.04M | ― | 174.77% | ― | -1.52% | 22.36% |
* Communication Services Sector Average
Performance Comparison
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Skillz
7.21
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CCG
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0.74
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KORE
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BODI
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4.15
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-51.18%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.