Skillz shares target cut to $8.50 but retains buy rating

© Reuters.

On Monday, Stifel adjusted its outlook on Skillz Inc. (NYSE:SKLZ), a mobile gaming platform, by reducing the price target to $8.50 from the previous $10.50. Despite this change, Stifel maintained a Buy rating on the company’s stock. The revision follows the analysis of Skillz’s fourth-quarter earnings and a review of the company’s financial model.

Skillz reported its fourth-quarter results earlier in the week, prompting Stifel to update its projections. For the year 2024, Stifel now expects Skillz to report an Adjusted EBITDA loss of $12 million, an improvement over the previously anticipated loss of $29 million. The forecasted GAAP revenue is set at $145 million, which indicates a 3% year-over-year decline from the earlier estimate of $180 million.

Looking ahead to the following year, Stifel introduced a new projection for Skillz, anticipating an Adjusted EBITDA of $2 million on GAAP revenue of $159 million. This represents an expected year-over-year revenue growth of 10%. Stifel’s outlook is based on the company’s performance and the adjustments made to the financial model after the earnings report.

Skillz has indicated that it expects to achieve a positive Adjusted EBITDA on a run-rate basis by the end of the calendar year 2024. This information was highlighted as a note in the analysis, providing a timeline for the company’s anticipated return to profitability.

The adjustment of the price target reflects Stifel’s revised expectations based on Skillz’s most recent financial data and future projections. Despite the reduction in the price target, the firm’s continued Buy rating suggests confidence in the company’s potential for recovery and growth.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.