Skillz (NYSE:SKLZ) stock closed 24.46% higher on Thursday, April 6, following the disclosure that its CEO, Andrew Paradise, purchased its shares. Per an SEC filing, Paradise purchased 1.5 million shares of this mobile gaming platform at an average price of $0.56. While Paradise bought SKLZ stock, it has a Neutral Smart Score on TipRanks.
A top company insider buying its stock is seen as a positive development, giving a lift to the company’s share price. Further, the move comes at a time when the stock has lost about 78% of its value in a year. Besides for trading at a discount, SKLZ has managed to control its costs and is heading in the direction of profitability, which is a positive signal.
Michael Pachter of Wedbush is bullish on the stock as the company moves closer to becoming profitable. The analyst remains impressed by the reduction in SKLZ’s user acquisition cost and marketing spend. His price target of $3.75 implies a significant upside potential of 451.31%.
Pachter said, “While the company remains unprofitable, it has managed to curb cash burn and EBITDA losses, showing sequential improvement in each quarter this year.”
The company focuses on improving its go-to-market approach and driving efficiency, resulting in lower cash burn. During the Q4 conference call, SKLZ’s President Jason Roswig said, “We had a very successful effort in gradually reducing our user acquisition spend to a level that we believe will prepare us for profitable growth going forward.”
Furthermore, Roswig expects engagement marketing spend as a percentage of revenue to decline in the coming quarters, which will cushion its bottom line.
While SKLZ is focusing on turning profitable, let’s check what TipRanks’ data suggests about the stock.
What’s the Prediction for Skillz Stock?
SKLZ has managed to reduce its cash burn, which is a positive. Moreover, the company expects to return to growth and turn profitable by 2024. However, given the declines in paying monthly active users and macro headwinds, SKLZ stock sports a Neutral Smart Score of six on TipRanks.
