Buy Skillz as Acquisitions and Partnerships Power SKLZ Stock to $30

Skillz (NYSE:SKLZ) stock has been very strong recently.

A close-up shot of hands playing a video game on a mobile phone, like those offered by Skillz.
Source: Shutterstock

It’s up over 40% over the past few months. And also, some strong fundamental developments have worked to quiet the bear thesis and underscore the bull thesis.

We think the rally behind SKLZ stock has legs.

SKLZ Stock: The Big Picture for Skillz

Skillz is at the epicenter of a shift in mobile gaming economic models. Digital advertising, everyone is discovering, outright sucks. Nobody clicks those ads, except maybe by accident. They don’t monetize at all. So, the cost to acquire new users in mobile apps is very high, resulting in a broken unit economic model.

But esports rocks.

Esports is proving to be an exceptionally more promising way to monetize the mobile ecosystem. Everyone loves to bet, everyone loves to compete and everyone loves the chance to win money.

Why rely on barely functional digital ads when there’s a better option? Esports competitions give consumers exactly what they want. So, unsurprisingly, they have super high engagement and yield much higher revenue per sub, on the same cost basis. This results in far superior unit economics.

Long-term, every game will shift to an esports model and abandon digital ads.

Skillz is the backbone of this shift. They provide the technology tools that app developers need to equip their games with esports functionality.

They also have a secret sauce, their anti-cheat algorithm, that keeps games fair for all.

The potential here is enormous as Skillz becomes a platform every mobile app developer in the world uses.

Near-term, we like the current momentum in the stock on the back of the Aarki acquisition. With Aarki, an advanced machine learning-powered marketing platform, Skillz will have it all.

This is because Skillz creates tools to help app developers make games. But making a game is only half the challenge.

Getting people to know about and use your app is the other half. Skillz former ignored that market, but with Aarki, it is now equipped to serve app developers in this regard. Aarki provides data-driven advertising so that app developers can get people to use their apps in the first place.

Combining these two platforms creates a robust, end-to-end ecosystem that solves every problem for an app developer, from development to distribution.

Bottom Line on SKLZ Stock

We think the market loves this deal.

And clearly it does, because PLBY Group (NASDAQ:PLBY) has taken an interest in Skillz too.

Starting June 11 and lasting for four weeks, fans across the globe will be able to partake in a series of Playboy-themed, Skillz-powered games. The array of games offered will include pool, solitaire and a variant of 21, and contestants can win money as well as real-world Playboy merchandise.

On top of everything else Skillz has going for it, this collaboration with PLBY Group could be huge for both companies.  It shows investors and developers that Skillz’s platform is already viable and alluring for big brands. And as for PLBY Group, the collaboration will make them money.

Widespread enthusiasm for the esports shift will continue to push SKLZ stock higher. We’re expecting it to hit $30 soon.

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On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.

By uncovering early investments in hypergrowth industries, Luke Lango puts you on the ground-floor of world-changing megatrends. It’s how his Daily 10X Report has averaged up to a ridiculous 100% return across all recommendations since launching last May. Click here to see how he does it.

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