Skillz is the leading mobile games platform that brings players together to compete in an equal, enjoyable, and meaningful way. The Skillz platform enables social competition in games, allowing developers to create multi-million dollar franchises. Skillz (Nyse Sklz WS at https://www.webull.com/quote/nyse-sklz-ws) manages billions of casual esports tournaments for millions of mobile players around the world, and distributes millions in prizes per month, thanks to its proprietary technology.
Skillz has been named one of Faster Company’s Most Innovative Companies, CNBC’s Disruptor 50, Forbes’ Next Billion-Dollar Startups, and the Inc. 5000’s #1 fastest-growing company in the United States.
Investment Thesis
Skillz is a company with a high gross profit margin that is quickly expanding its sales. Even if its revenue stream is driven by a limited number of games, the underlying platform is well-positioned for future blockbuster releases.
Investors are asked to pay 22x forward sales on average, which I believe is a very low price for what’s on offer. Investors could be having the best entry point to dollar-cost average their place right now.
How does Skillz make money for its investors?
Over the past few years, Skillz has nearly doubled its sales. In 2020, sales increased by 92 percent year over year to $230 million. The number of games pulling in more than $1 million in annual sales increased from 23 to 36 in the same year.
Skillz has achieved 95 percent gross profit margins in 2019 and 2020, owing to its sustainable platform, which needs little overhead and maintenance. Skillz’s average revenue per user in 2020 was more than triple that of leading game studios Gluu and Zynga, at $7.
Can Skillz win for you?
Skillz is quickly expanding even though there are no top 10 games on the Apple or Android App Stores. However, it has recently established partnerships with the NFL, Bowlero (the Pro Bowlers’ Association’s parent company), and Ganassi Racing. Skillz has plans to bring popular Tetris games to the Skillz network, and expand into new markets such as India and Europe.
Bearish investors would argue that Skillz isn’t profitable, that its games aren’t as sophisticated as console games or other smartphone offerings, and the company’s profit is expected to rise very slowly over the next two years. Skillz’s forecasts, on the other hand, include the costs of expanding into new markets such as India and Europe, but not the sales or earnings growth that could result. And the games that were on the platform in 2020 are only included in the projections for 2021 and 2022.
In 2021, investors should keep an eye on what new games are added as a result of Skillz’s new partnerships, especially the NFL partnership, as well as how much additional revenue and earnings the business generates from expanding internationally. Skillz (Nyse Sklz WS) is a long-term investment that will see its share price fluctuate in the short term as it reinvests in its growth, but will provide excellent returns over several years. You can check more stocks such as nasdaq fcel at https://www.webull.com/quote/nasdaq-fcel.