Skillz (SKLZ) Stock Forecast & Price Target

Skillz Inc. has demonstrated a positive turnaround with a 2.5% year-over-year growth in paid monthly active users, marking the first increase since the first quarter of 2022, which is attributed to enhanced marketing strategies aimed at re-engaging lost users. Anticipated growth is expected to continue in the second quarter, with an estimated acceleration of 6.6% year-over-year as user spend from re-engaged customers increases. Additionally, the company's strategy focuses on scaling spending to facilitate growth primarily through user acquisition, which aligns with its core business model of connecting developers with competitive players on its platform.

Skillz Inc. is experiencing a continued decline in total monthly active users, with an estimated decrease of 2.1% year-over-year, which raises concerns about user engagement and growth prospects. Although the company is actively working to lower its operating cash burn, this effort could indicate underlying financial distress as the business seeks to manage costs amidst declining user metrics. The primary revenue source from the Skillz segment, combined with these troubling trends, contributes to a negative outlook for Skillz's stock performance moving forward.