Analyst Estimates: Here's What Brokers Think Of Skillz Inc. (NYSE:SKLZ) After Its First-Quarter Report

It's been a sad week for Skillz Inc. (NYSE:SKLZ), who've watched their investment drop 17% to US$15.48 in the week since the company reported its first-quarter result. The results don't look great, especially considering that statutory losses grew 15% toUS$0.15 per share. Revenues of US$83,677,000 did beat expectations by 3.2%, but it looks like a bit of a cold comfort. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Skillz

Taking into account the latest results, the most recent consensus for Skillz from five analysts is for revenues of US$368.2m in 2021 which, if met, would be a substantial 36% increase on its sales over the past 12 months. Per-share losses are expected to explode, reaching US$0.50 per share. Before this latest report, the consensus had been expecting revenues of US$369.8m and US$0.50 per share in losses.

The consensus price target was unchanged at US$27.33, suggesting that the business - losses and all - is executing in line with estimates. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Skillz, with the most bullish analyst valuing it at US$34.00 and the most bearish at US$17.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Skillz's revenue growth will slow down substantially, with revenues to the end of 2021 expected to display 51% growth on an annualised basis. This is compared to a historical growth rate of 88% over the past year. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 16% annually. So it's pretty clear that, while Skillz's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Skillz going out to 2025, and you can see them free on our platform here..

It is also worth noting that we have found 3 warning signs for Skillz that you need to take into consideration.

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This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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