Skillz Inc. (NYSE: SKLZ)

Sector: Communication Services Industry: Electronic Gaming & Multimedia CIK: 0001801661
Market Cap 57.60 Mn
P/B 0.45
P/E -0.74
P/S 0.62
ROIC (Qtr) -27.60
Div Yield % 0.00
Rev 1y % (Qtr) 11.44
Total Debt (Qtr) 128.28 Mn
Debt/Equity (Qtr) 1.01
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About

Skillz Inc. (SKLZ), a company that operates in the mobile gaming industry, has established itself as a leader in the development and publishing of competitive mobile games. With a focus on skill-based gaming, the company has developed a platform that enables developers to create and publish games accessible to a wide range of players. Skillz, founded in 2012 by Andrew Paradise and Casey Chafkin, has grown to become a global leader in the mobile gaming industry, competing with the likes of Electronic Arts, Activision Blizzard, Take-Two Interactive,...

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Investment thesis

Bull case

  • Healthy cash reserves of 211.80M provide 466.52x coverage of short-term debt 454000, demonstrating strong liquidity position and minimal refinancing risk.
  • Tangible assets of 309.25M provide robust 6.80x coverage of other current liabilities 45.50M, indicating strong asset backing.
  • Operating cash flow of (75.73M) provides strong 10.10x coverage of operating expenses (7.50M), showing operational efficiency.
  • Cash reserves of 211.80M provide solid 708.36x coverage of other non-current liabilities 299000, indicating strong liquidity.
  • Cash reserves of 211.80M provide robust 3.93x coverage of current liabilities 53.94M, indicating strong short-term solvency.

Bear case

  • Investment activities of (5.92M) provide weak support for R&D spending of 18.21M, which is -0.32x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • The company's operating cash flow of (75.73M) shows concerning coverage of stock compensation expenses of 21.30M, with a -3.56 ratio indicating potential earnings quality issues.
  • Free cash flow of (81.64M) provides weak coverage of capital expenditures of 5.92M, with a -13.80 ratio suggesting additional external financing needs for growth initiatives.
  • Operating earnings of (73.18M) show weak coverage of depreciation charges of 1.06M, with a -68.90 ratio indicating high capital intensity and potential reinvestment needs.
  • Long-term investments of 53.77M represent a high 2.51x of fixed assets 21.45M, indicating potential overexposure to financial assets versus operational capabilities.

Segments Breakdown of Revenue (2024)

Peer comparison

Companies in the Electronic Gaming & Multimedia
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 NTES NetEase, Inc. 76.19 Bn 15.89 4.76 0.91 Bn
2 EA Electronic Arts Inc. 50.25 Bn 73.90 6.88 1.89 Bn
3 RBLX Roblox Corp 43.57 Bn -40.91 8.91 1.64 Bn
4 TTWO Take Two Interactive Software Inc 34.06 Bn -8.59 5.19 3.51 Bn
5 PLTK Playtika Holding Corp. 1.22 Bn 14.21 0.45 2.54 Bn
6 SOHU Sohu.com Ltd 0.46 Bn 1.16 0.78 0.00 Bn
7 GRVY GRAVITY Co., Ltd. 0.45 Bn 8.02 1.09 0.00 Bn
8 DDI DoubleDown Interactive Co., Ltd. 0.43 Bn 4.17 1.19 0.04 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets -0.38 0.73
EV to Cash from Ops. EV/CFO 1.56 9.02
EV to Debt EV to Debt -0.92 42.93
EV to EBIT EV/EBIT 1.61 5.14
EV to EBITDA EV/EBITDA 1.66 -0.17
EV to Free Cash Flow [EV/FCF] EV/FCF 1.44 2.00
EV to Market Cap EV to Market Cap -2.04 0.31
EV to Revenue EV/Rev -1.28 -278.61
Price to Book Value [P/B] P/B 0.45 5.21
Price to Earnings [P/E] P/E -0.74 5.61
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 1,143.22
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 15.62
Dividend per Basic Share Div per Share (Qtr) 0.00 0.31
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 21.95
Interest Coverage Int. cover (Qtr) -16.85 2.42
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -139.28 -144.92
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -31.99 2,047.52
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 2.39
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -71.52 10.58
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -70.68 -40.36
EBIT Growth (1y) % EBIT 1y % (Qtr) -72.43 28.44
EBT Growth (1y) % EBT 1y % (Qtr) -108.86 -25.09
EPS Growth (1y) % EPS 1y % (Qtr) -139.90 -25.14
FCF Growth (1y) % FCF 1y % (Qtr) -3,417.62 -203.71
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -14.14 977.78
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.30 0.61
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.03
Cash Ratio Cash Ratio (Qtr) 3.93 1.98
Current Ratio Curr Ratio (Qtr) 4.32 4.93
Debt to Equity Ratio Debt/Equity (Qtr) 1.01 -1.05
Interest Cover Ratio Int Coverage (Qtr) -16.85 2.42
Times Interest Earned Times Interest Earned (Qtr) -16.85 2.42
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -78.20 9,395.66
EBIT Margin % EBIT Margin % (Qtr) -79.32 10,488.08
EBT Margin % EBT Margin % (Qtr) -84.03 -43,333.75
Gross Margin % Gross Margin % (Qtr) 86.20 57.20
Net Profit Margin % Net Margin % (Qtr) -84.00 -43,332.40