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Factors Setting the Tone for Skillz's (SKLZ) Q3 Earnings

Skillz' (SKLZ) is likely to have gained from increased paying monthly active users and enhanced player retention plans in Q3. Yet, IDFA impact and higher user acquisition spending may have...

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This story originally appeared on Zacks

Skillz Inc. SKLZ is scheduled to report third-quarter 2021 results on Nov 3, after market close. In the last reported quarter, the company’s earnings missed the Zacks Consensus Estimate by 30% but revenues beat the same by 1.6%.

- Zacks

Trend in Estimate Revision

For the quarter to be reported, the Zacks Consensus Estimate for loss per share has been unchanged at 13 cents over the past 30 days. The consensus mark for revenues is pegged at $102.7 million.

Skillz Inc. Price and EPS Surprise

Skillz Inc. Price and EPS Surprise

Skillz Inc. price-eps-surprise | Skillz Inc. Quote

Factors to Consider

Skillz’s increased paying monthly active users (MAU) and competitive advantage, owing to the company’s in-app purchases, are likely to have driven its third-quarter 2021 performance. Also, a rise in the company’s gross marketplace volume might have driven its performance in the to-be-reported quarter. Furthermore, the company’s Aarki acquisition and high ad spending might have contributed to revenues in the quarter. With the reopening of economies and people spending less time at home playing games, Skillz is expected to have lost players to some extent.

It has been consistently focused on international expansion and conversion of playing users into paying users. The recently-launched developer progression feature allows game developers to create in-game milestones for players. This is expected to have enhanced player retention and engagement in third-quarter 2021.

Furthermore, the company has been witnessing an extended android footprint that is growing faster than iOS. This might have helped it generate improved revenues in third-quarter 2021.

Yet, a rise in costs and expenses is likely to have affected margins in the to-be-reported quarter. Precisely, Identifier for Advertisers (IDFA) disruption and higher user acquisition spending levels to attract new users may have weighed on its bottom line.

What Our Model Indicates

Our proven model does not conclusively predict an earnings beat for Skillz this time around. That is because a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here, as you will see below.

Earnings ESP: Earnings ESP for Skillz is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company currently has a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks With Favorable Combination

Here are some companies in the Zacks Consumer Discretionary sector, which according to our model, have the right combination of elements to post an earnings beat in their respective quarters to be reported.

Golden Entertainment, Inc. GDEN sports a Zacks Rank #1 and has an Earnings ESP of +37.45%.

Accel Entertainment, Inc. ACEL has a Zacks Rank #2 and an Earnings ESP of +20.00%.

Choice Hotels International, Inc. CHH has a Zacks Rank #2 and an Earnings ESP of +4.04%.

 

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Choice Hotels International, Inc. (CHH): Free Stock Analysis Report

 

Golden Entertainment, Inc. (GDEN): Free Stock Analysis Report

 

Accel Entertainment, Inc. (ACEL): Free Stock Analysis Report

 

Skillz Inc. (SKLZ): Free Stock Analysis Report

 

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