Skillz (SKLZ) Stock Forecast & Price Target

Skillz Inc. has demonstrated a positive trend in paid monthly active users, which returned to growth with a 2.5% year-over-year increase, marking a significant turnaround since the first quarter of 2022 and indicating effective marketing strategies to re-engage lost users. Furthermore, projections for the second quarter suggest an estimated acceleration to 6.6% year-over-year growth in user spending, driven by these re-engagement efforts. The company is expected to increase spending on user acquisition, which positions Skillz favorably for continued revenue growth, primarily derived from its core Skillz segment.

Skillz Inc. is facing a concerning trend regarding its total monthly active users, with an estimated decline of 2.1% year-over-year, indicating potential challenges in user engagement and retention. While the company has taken steps to reduce operating cash burn, the persistent decrease in active users raises questions about the sustainability of its primary revenue stream from the Skillz segment. Additionally, the reliance on a limited geographical revenue base, primarily from the United States, may further exacerbate financial vulnerabilities in a competitive mobile gaming market.