MAUs (month-to-month energetic customers) is an important metric for corporations who rely on platform utilization to gauge the well being of its enterprise. Shares usually fall or rise following a quarterly assertion which confirmed a robust transfer in both route.
“We predict most upside potential on the inventory has fallen considerably given its flattish MAU trajectory,” The 5-star analyst stated. “Administration’s renewed give attention to scaling paying MAUs (467K in Q1), quite than merely whole MAUs suggests Skillz will make investments much less aggressively than we thought in direction of turning into a staple client leisure model with 10s of hundreds of thousands of customers (e.g. Zynga, King Leisure and so forth.), thereby limiting the utmost advert monetization alternative.”
Fitzgerald thinks the cellular esports platform’s MAUs dropped sequentially in Q2. Going by third celebration knowledge, downloads of apps suitable with Skillz have been trending south since January 2021, and in combination, declined by 35% quarter-over-quarter. This contains each Blackout Bingo and Solitaire Dice, which Fitzgerald believes accounted for greater than 70% of the primary quarter’s revenues.
That stated, within the medium time period, the analyst believes the pivot towards Paying MAUs additionally lowers the draw back threat to the inventory, because it “conserves ‘dry powder.’”
Different key areas to watch throughout the earnings name embody the efficiency of former AirBnB govt Ian Lee, who joined Skillz as the brand new CFO in Q2. Indicators of “steady management, a devoted IR operate, and additional disclosures of extra KPIs might assist increase curiosity amongst new buyers with a protracted bias,” Fitzgerald claims.
Updates on platform and geographic growth, together with the timing of entry into the Indian market, the newest information on the progress of the NFL partnership and extra particulars on how the corporate plans to develop Aarki, the demand-side promoting firm acquired in a deal price $150 million and anticipated to shut in Q3, also needs to be factors of curiosity.
To this finish, Fitzgerald sticks to an Equal Weight (i.e. Maintain) score. However the analyst may as nicely have stated “purchase” — as a result of he thinks the inventory, presently at $14.13, might zoom forward to $18.50 inside a yr, delivering 31% income to new buyers. (To observe Fitzgerald’s observe report, click here)
The remainder of the Road leans to the bullish aspect. SKLZ’s Average Purchase consensus score is predicated on 3 Buys and a pair of holds. There’s attainable upside of 73%, ought to the typical worth goal of $24.50 be met within the yr forward. (See SKLZ stock analysis on TipRanks)
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Disclaimer: The opinions expressed on this article are solely these of the featured analyst. The content material is meant for use for informational functions solely. It is rather vital to do your individual evaluation earlier than making any funding.