Skillz (SKLZ, Financial) experienced a significant stock movement, with shares dropping by 14.09% to $4.39, driven by the company's disappointing fourth-quarter 2024 financial results. The decline in key metrics, including user count and paying monthly active users falling short of expectations, played a crucial role in the negative market reaction.
Analyzing the financial status of Skillz (SKLZ, Financial), several red flags become apparent. The company is facing five severe warning signs, including an Altman Z-score indicating financial distress with a potential risk of bankruptcy within the next two years. Specifically, the Altman Z-score stands at -3.05. Furthermore, revenue per share has been declining over the past five years, with gross and operating margins also experiencing long-term declines, averaging -2% and -31% per year, respectively.
On the profitability front, Skillz (SKLZ, Financial) registers a return on equity (ROE) of -24.62% and a return on assets (ROA) of -12.45%, highlighting its struggles in generating profit. The EBITDA margin is deeply negative at -97.14%. Financially, the company’s Piotroski F-Score is low at 3, suggesting poor business operations.
Valuing Skillz (SKLZ, Financial), the GF Value assessment indicates that the stock is "Modestly Undervalued" with a GF Value of $5.71. This suggests that despite current challenges, the stock might have potential upside based on its intrinsic value. For more details, visit the GF Value page.
From a valuation perspective, the stock’s Price-to-Book (PB) ratio of 0.43 is close to its 1-year low, indicating potential undervaluation. The Price-to-Sales (PS) ratio, at 0.83, is also near its low, reflecting the depressed stock price.
Overall, while Skillz (SKLZ, Financial) shows potential undervaluation, the severe financial warning signs and declining business metrics pose significant risks for investors. Potential investors should be cautious and consider these factors carefully before making investment decisions.
