Jan. 12, 2021 10:48 AM ETSkillz Inc. (SKLZ)By: Kim Khan, SA News Editor
Mobile gaming company Skillz (SKLZ, +6%) is climbing on a call from Stifel that puts a Buy rating on the stock, with a price target of $28.
"Given its unique and differentiated model, with several planned strategic initiatives, the business should enjoy significant growth + margin expansion over the next several years," Stifel analyst Drew Crum writes, according to Bloomberg.
Skillz went public through a deal with blank-check company Flying Eagle Acquisition in September.
"Instead of focusing on in-game ads, Skillz has a set of sticky developer tools like payments, marketing, and server hosting," Ishan Puri wrote on Seeking Alpha last month. "I believe these will eventually add additional gross profit and contribution margin to the business over time that is not accounted for today."
Skillz is a well run gaming company that is mission driven and riding major tailwinds. It has well over $1.6 billion in gross marketplace and over 2 billion tournaments played per year. As a new generation emerges that is smartphone-first, I believe gaming and gambling are going to grow in big ways.
Skillz is also successful at getting users back to the platform - the most common problem with gaming companies in general. It ranks above TikTok, Facebook (NASDAQ:FB), and other platforms in minutes played per day. I believe this bodes well for the general effectiveness of the platform.
SOURCE : Flying Eagle: Great Long-Term Play, Dec. 7, 2020, Ishan Puri, SeekingAlpha