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Skillz (SKLZ) To Report Q1 Earnings: What's in The Offing?

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Skillz Inc. (SKLZ - Free Report) is scheduled to report first-quarter 2021 results on May 4, 2021. In the last reported quarter, the company reported a negative earnings surprise of 30%.

Let's take a look at how things have shaped up in the quarter.

Factors to Note

Skillz’s performance in first-quarter 2021 is likely to have benefited from rise in monthly active users, average revenue per user (ARPU) and paying monthly active users. Moreover, increase in gross marketplace volume is likely to have helped the company.

Skillz Inc. Price and EPS Surprise

 

Skillz Inc. Price and EPS Surprise

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

 

Also, focus on content creation, sponsorship for prize pool, international expansion, conversion of playing users into paying users and strategic partnerships is likely to have boosted the company’s performance in the first quarter.

On Mar 24, Skillz provided its first-quarter 2021 outlook. The company expects first-quarter revenues at $80 million. It expects Monthly Active Users and Paying Monthly Active Users at 2.6 million and 0.45 million, respectively, for the to-be-reported quarter. However, adjusted EBITDA is pegged at a loss of $37 million.

However, rise in marketing costs is likely to have affected margins in the to-be-reported quarter. In fourth-quarter 2020, total costs and expenses rose 15.3% year over year.

What the Zacks Model Unveils

Our proven model predicts that Skillz is unlikely to beat earnings estimates this quarter. This 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. But that's not the case here.

The company has an Earnings ESP of -2.44%. In fact, the Most Accurate Estimate for the current quarter is currently lower than the broader Zacks Consensus Estimate of a loss of 14 cents per share.

The company carries a Zacks Rank #4 (Sell). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks Poised to Beat Earnings Estimates

Here are some stocks from the Zacks Consumer Discretionary space that investors may consider, as our model shows that these have the right combination of elements to post an earnings beat in the quarter to be reported:

Choice Hotels International, Inc. (CHH - Free Report) has a Zacks Rank #3 and an Earnings ESP of +17.47%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Caesars Entertainment, Inc. (CZR - Free Report) has a Zacks Rank #3 and an Earnings ESP of +1.69%.

Hyatt Hotels Corporation (H - Free Report) has a Zacks Rank #3 and an Earnings ESP of +7.29%.

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