In today's video, I look at Skillz (SKLZ 17.89%). The company just reported earnings, and the stock price is down. Below I share both bearish and bullish points.
Three bearish points on Skillz:
- The company reported a Q1 loss of $53 million, which is more than triple its year-ago loss of $15 million.
- Skillz's CFO is leaving the company, and some bears speculate that the timing could be linked to a recent short report.
- Skillz has not seen much growth in monthly active users (MAUs). For Q1 2021, it reported 2.7 million compared to 2.6 million a year ago.
Three bullish points on Skillz:
- Skillz has a strong cash position of $613 million and no debt. For Q1 2021, it reported revenue growth of 92% year over year and increased its guidance for the year.
- Skillz is still on schedule to expand into India later this year. As of now, a considerable portion of the company's revenue comes from North America. Skillz is also improving its technology to allow its services to move into racing, shooting, and battle royale-style games.
- Paying MAUs, which management says is the metric investors should focus on, is now 467,000 for Q1 2021, compared to 258,000 for Q1 2020.
Click the video below for my full thoughts.
*Stock prices used were the midday prices of May 5, 2021. The video was published on May 5, 2021.