Shares of Skillz (SKLZ 2.22%) are jumping over 10% higher in midday trading Wednesday after Citi resumed coverage of the the mobile esports platform with a buy rating and a $23-per-share price target.
Skillz stock had closed trading yesterday at $11.61 per share, meaning Citi analyst Jason Bazinet believes the stock can double over the coming year.
The Wall Street endorsement comes after investing guru Cathie Woods picked up a large tranche of Skillz stock for her ARK Invest exchange-traded fund.
Skillz enables users to wager real money on mobile games played during tournaments and competitions and to play games with nonmonetary stakes. It sees a longer-term opportunity to expand into nongaming competitive play, such as fitness or education.
But nearer term, Skillz recently acquired Aarki, a global demand-side advertising platform that reaches 465 million people. CEO Andrew Paradise recently told Citi's Global Technology Conference that the acquisition "allows us to sniff the data on 5 trillion auctions every month, and to be able to build the data value chain from there all the way through to end user LTV [long-term value]."
That's where Skillz is currently directing its attention, and it could be why Bazinet decided now is an opportune time to get back into the stock.
Wall Street is looking for Skillz to generate $1 billion in revenue by 2025, when it will also turn profitable, a position it is currently marching toward.
With almost a quarter of Skillz shares currently shorted, it's possible shares could push even higher as short-sellers cover their position. Whether a short squeeze will occur with only three and a half days to cover those positions (anything over seven is considered a lot) seems doubtful.