IB Net Payout Yields Model

Skillz: No Improvement In Results


  • Skillz failed to meet Q3'21 revenue targets despite more aggressive spending in Sales & Marketing.
  • The company outspent revenues again driving the adjusted EBITDA loss up to $41.7 million.
  • The stock remains expensive at 9x aggressive 2022 revenue targets.
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After another disappointing quarter, Skillz (SKLZ) appears headed even lower. The stock was priced irrationally after closing a SPAC deal earlier this year and the company still hasn't proven the business model isn't reliant on irrational marketing spending. My investment thesis is Neutral on the stock until the company is more efficient with marketing spending and can drive organic user growth.

Read the full article on Seeking Alpha. 

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

Update - Feb. 23

Guidance is just brutal. The average 2022 quarter is below the Q4 level.

-Q4 GAAP EPS of -$0.25 misses by $0.10.
-Revenue of $108.85M (+60.7% Y/Y) misses by $5.2M.
-Revenue grew 61% on a year-over-year basis to $108.8 million.
-Gross Profit grew 56% on a year-over year basis to $100.4 million.
-Net Loss increased to $99.0 million from $67.0 million in the prior year period.
-Paying Monthly Active Users (PMAU) increased 56% year-over-year to 0.61 million.
-Average Revenue Per Paying User (ARPPU) was up 3% year-over-year to $59.
-The Company is initiating its 2022 revenue guidance at $400 million vs. $548.78M consensus.

Update - Feb. 1

Yikes, $ARKK dumps shares in $SKLZ at the lows. Such moves by major funds are the ones that create a bottom. 

-Cathie Wood appears to be cutting ties with the online mobile video game platform Skillz Inc. (NYSE:SKLZ). The CEO of ARK Invest sold $11.13M shares worth of positions between both ARK Innovation ETF (NYSEARCA:ARKK) and ARK Next Generation Internet ETF (NYSEARCA:ARKW) on Monday.

-Based on Wood's trading patterns and the massive size of the sale, the transaction looks like a potential precursor to an eventual exit"

-Wood's flagship fund ARKK unloaded 7.48M shares of SKLZ, while ARKW cut 3.65M shares, according to the firm's latest voluntary trade disclosure records.

-SKLZ is currently sitting at near all-time lows of $4.81 a share and is down 82.8% over a one-year trading period and off 89.6% from its record trading high of $46.29 back on Feb. 5, 2021.

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