BTIG analyst Clark Lampen has maintained their neutral stance on SKLZ stock, giving a Hold rating yesterday.
Clark Lampen’s Hold rating on Skillz’s stock is based on a number of factors. The Q3 revenue for Skillz fell short of expectations due to a faster-than-expected decrease in the paying user base. Despite management’s optimism about future growth strategies, Lampen believes that the pathway towards revenue and profit growth remains difficult. This is further underscored by the fact that EBITDA also did not meet predictions, despite some operational leverage improvements.
In addition, while Skillz has moved to a new revenue share model based on entry fees, it has not yet produced the expected increase in revenue. Management’s focus is currently on improving user economics before investing in user acquisition. However, Lampen suggests that investors will require evidence of revenue growth before they start rewarding Skillz for its improvements. Lampen is also cautious about the company’s future due to the uncertainty around what will stimulate better user engagement and developer onboarding. As a result, he maintains a Hold rating on the stock and has slightly lowered his estimates based on these lower-than-anticipated results.
According to TipRanks, Lampen is an analyst with an average return of -12.3% and a 38.95% success rate. Lampen covers the Technology sector, focusing on stocks such as Unity Software, Roblox, and Skillz.
In another report released yesterday, Citi also maintained a Hold rating on the stock with a $5.50 price target.
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Skillz (SKLZ) Company Description:
Founded in 2012, Skillz operates as a marketplace that connects mobile game players worldwide and provides a competitive gaming experience. The company leverages its platform to host casual eSports tournaments.
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