What Happened to Skillz’ Stock Price Today?
- Shares of mobile eSports technology company Skillz (NYSE:SKLZ) rose slightly after the company reported strong first-quarter numbers, with SKLZ stock up about a percent on the news.
Source: Shutterstock - Even with the gain, SKLZ stock is still about 60% off its early February highs.
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SKLZ Earnings: The Straight Facts
- Skillz’s Q1 numbers were really good. Remember: The company announced preliminary Q1 numbers just a month ago. The actual numbers Skillz reported were better than those preliminary numbers on revenue, users, and EBITDA. Management also raised the full-year 2021 revenue guide.
- The growth rates here remain impressive. Paying users rose 81%. GMV rose 85%. Revenues rose 92%.
- Gross margins continue to improve. Adjusted EBITDA levels remain in the red, but the losses aren’t that wide and it looks like only a matter of time before those numbers move into the black.
- Management’s letter to shareholders was full of good news, too.
- Further, it’s doing all it can to expand beyond card and board games (which represent the majority of revenues today but a minority of the broader mobile gaming market).
- The most successful game companies focus on developers. Make the developers happy and you’ll get killer apps for your platform. That’s exactly what Skillz is doing — it’s listening to their dev community and bringing in new features that allow developers to better create memorable in-game moments and milestones. What’s more,they’ve opened what they call “synchronous technology” which will allow devs to create fast-paced twitch games in the racing, fighting and shooting genres.
- The NFL deal is progressing as expected, with the development challenge underway.
- India expansion is on track by late 2021. Management appears to be doing this expansion very smartly, and is creating a game-plan from which the company can replicate additional geographic expansions in 2022-plus.
- Investors were pleased. SKLZ stock rose after the print.
Does It Matter?
- Skillz is a revolutionary technology company that is pioneering a new genre of mobile gaming — real-money eSports — with a broad set of mission-critical tools for eSports game development.
- The long-term potential here is unmistakably large. That’s because gaming is shifting to mobile titles, consumers love to compete with each other, and everyone loves the chance to win money.
- SKLZ stock has been knocked down multiple times over the past few months by a few short-seller reports.
- Those reports should be ignored. They focused on things which Skillz proved untrue and/or overstated with its blockbuster first quarter earnings report.
- As those reports fade from memory, SKLZ stock should bounce back.
SKLZ Stock Price Forecast
- Could SKLZ stock rebound back to $30? Yes.
- We think shares are actually worth closer to $40 today, based on the company’s enormous revenue and earnings growth potential over the next decade.
- Dip-buyers here will be rewarded handsomely.
Skillz stock belongs in a basket of high-quality, hypergrowth stocks with a ton of long-term potential that has been beaten and bruised over the past few weeks as the market has turned its back on early-stage growth companies.
Now is the time to buy these stocks.
These are the companies that are reimagining the digital landscape, as globalization and technological convenience converge. My favorite plays in this space are stocks in social media, esports, advertising, streaming media and iGaming.
Many of these stocks are deeply oversold, with 100%-plus upside potential from current levels. Right now, the tide appears to be turning in their favor.
SKLZ stock is just one of dozens of stocks out there that could give you big returns from current levels over the next few months and years. The others? Well, we have created a portfolio of stocks that we think represent the most innovative, most exciting early-stage tech stocks in the market with big-time upside potential.
To get the names, ticker symbols, and key business details of those potential 10X winners, subscribe to Innovation Investor here.
On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.
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