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Why Skillz Stock Is Falling Today

What happened

Shares of Skillz (NYSE: SKLZ) are falling today, down by 5% as of 12:51 p.m. EDT. The mobile esports platform provider will be reporting second-quarter results after the market close. The stock is down almost 30% year to date.

So what

Wall Street is cautiously optimistic about Skillz's potential, with five of the nine analysts covering the company rating it a buy. The rest rate it a hold. The consensus price target for the stock is $24.31 per share for the next year, implying almost 80% upside, but the current quarter might be tricky.

Analysts still expect Skillz to lose $0.11 per share in Q2, and while management didn't provide quarterly guidance, it has forecast full-year revenue will grow 63% to $375 million.

Image source: Getty Images.

Now what

Esports is one of the fastest-growing niches, and as the economy continues to reopen, more in-person gameplay, contests, and tournaments will take place. There may be some hesitancy on the part of the market over how the coronavirus variants will impact Skillz's business, as the U.S. Centers for Disease Control is calling for even vaccinated individuals to wear masks indoors once again.

Whatever the short-term impact the current situation may have on Skillz's quarterly report, it still appears the long-term outlook for its esports business remains bright.

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Rich Duprey has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Skillz Inc. The Motley Fool has a disclosure policy.


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