IB Net Payout Yields Model

Skillz: Costing Too Much To Acquire Customers


  • Skillz beats Q1 revenue targets and guides up revenues for 2021.
  • The company spent nearly $100 million on sales and marketing without meaningful growth in the MAUs for Q1.
  • The stock is far too expensive at 20x '21 sales targets when the user base isn't growing despite wild UA marketing spending.
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After a roller coaster ride the last six months, Skillz (SKLZ) has traded in a range under $20. The stock remains vastly overvalued for the current business prospects of the mobile skill based competition platform. My investment thesis remains negative on the stock after the recent rally back to overvalued levels.

Read the full article on Seeking Alpha. 

Disclosure: No position mentioned. Please review the disclaimer page for more details. 

Update - August 1

As investors were warned many times, Skillz was far over valued above at just $15. The gaming company spent far too much money on UA for the lack of MAU growth in the last quarter. The stock is now testing previous lows around $13, though Skillz remains a highly expensive stock.  

Finviz Chart

The company reports after the close on August 3 and needs a good report to turn around sentiment. The key focus is user growth and related UA spending. 


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