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Skillsoft Slips 72% in a Year: How Should Investors Play the Stock?
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Key Takeaways
Skillsoft shares have fallen 72% in a year, trailing peers as management reviews strategic options for GK.
SKIL is weighing a GK sale after a 16% y/y revenue drop and impairment, tied to weak instructor-led demand.
Skillsoft points to early AI-led Percipio wins and trades far below industry on P/E and EV/EBITDA.
Skillsoft Corp. (SKIL - Free Report) shares have plummeted 72.2% in a year against 17.3% growth in its industry and a 21% rise in the Zacks S&P 500 Composite.
SKIL has underperformed its industry peers, Acuity, Inc. (AYI - Free Report) and AppLovin (APP - Free Report) . Acuity and AppLovin have rallied 18.2% and 92.2%, respectively, in the same period.
1-Year Share Price Performance
Image Source: Zacks Investment Research
The six-month performance highlights that SKIL has underperformed Acuity and AppLovin. Skillsoft has dipped 47.1% against Acuity’s and AppLovin’s 22.2% and 79.5% growth, respectively.
Let us evaluate the SKIL stock to find out whether investors should buy it or stay away for now.
SKIL’s Strategic Pivot From GK Appears Promising
In the third quarter of fiscal 2026, Skillsoft announced a review of strategic alternatives for its Global Knowledge (“GK”) business segment, with the expectation of a potential sale. This decision was made following a 6% year-over-year dip in its top line due to the GK segment witnessing a 16% decline in revenues.
This detriment in the GK segment was identified to be due to a weak demand for physical and virtual instructor-led sessions. This segment registered a $20.8-million non-cash goodwill impairment loss, resulting in a $4.9-million adjusted net loss. GK’s potential sale could eventually stop the balance sheet from reducing its market.
Even the Talent Development Solutions (TDS) took a hit. However, it resulted in only a 2% year-over-year dip in its revenues due to a decline in B2C learner products. The CFO of the company remarked that the deterioration in GK’s performance masked TDS enterprise stabilization.
Having said that, management is pretty optimistic about the future of AI and how it pans out for the company. Percipio platform, riding on the AI-native roadmap of the company, witnessed early success as demonstrated by the signing of its first four large enterprise customers.
The decision not to provide revenues and adjusted EBITDA outlook for the GK segment while reaffirming the TDS segment’s guidance is a clear indication that management is inclined to evaluate its digital subscription business solely. While the expectation of a positive free cash flow may not be fulfilled soon, a strategic divorce from the GK segment may only have a positive impact on the business, putting it on the right path.
Skillsoft’s Outstanding Capital Return
Return on equity (ROE) is a profitability metric that assesses how effectively a company utilizes shareholders' equity to generate earnings. By the end of the third quarter of fiscal 2026, SKIL’s ROE was 83.1%, beating the industry’s 15.3%.
Image Source: Zacks Investment Research
Return on invested capital (ROIC) highlights a company’s efficacy in deploying total capital to generate operating profits. In the case of Skillsoft, it stands at 11.6%, below the industry’s 7.7%.
SKIL Trades Cheaper Than the Industry
Skillsoft is trading at 1.76 times forward 12-month price-to-earnings, significantly below the industry average of 26.05 times. Its trailing 12-month EV-to-EBITDA ratio stands at 2.55, below the industry average of 18.29. Being discounted on both counts is a major green flag for value-oriented investors as it suggests potential upside in the long haul.
Image Source: Zacks Investment Research
Buy Skillsoft Now
SKIL presents a compelling turnaround narrative focusing on its pivot from the GK business segment. Management’s decision to conduct a strategic review for alternatives to the GK segment is critical for its growth. By shedding this segment, the company can concentrate on its core TDS segment and its AI-backed Percipio platform.
Skillsoft generates strong capital returns, as evidenced by its ROE and ROIC, which outpaced the industry average. We recommend investors buy this stock now as the company trades at a discount compared with its industry, making it an attractive option for investors seeking to draw in high returns as the market realizes its true potential.
Image: Bigstock
Skillsoft Slips 72% in a Year: How Should Investors Play the Stock?
Key Takeaways
Skillsoft Corp. (SKIL - Free Report) shares have plummeted 72.2% in a year against 17.3% growth in its industry and a 21% rise in the Zacks S&P 500 Composite.
SKIL has underperformed its industry peers, Acuity, Inc. (AYI - Free Report) and AppLovin (APP - Free Report) . Acuity and AppLovin have rallied 18.2% and 92.2%, respectively, in the same period.
1-Year Share Price Performance
The six-month performance highlights that SKIL has underperformed Acuity and AppLovin. Skillsoft has dipped 47.1% against Acuity’s and AppLovin’s 22.2% and 79.5% growth, respectively.
Let us evaluate the SKIL stock to find out whether investors should buy it or stay away for now.
SKIL’s Strategic Pivot From GK Appears Promising
In the third quarter of fiscal 2026, Skillsoft announced a review of strategic alternatives for its Global Knowledge (“GK”) business segment, with the expectation of a potential sale. This decision was made following a 6% year-over-year dip in its top line due to the GK segment witnessing a 16% decline in revenues.
This detriment in the GK segment was identified to be due to a weak demand for physical and virtual instructor-led sessions. This segment registered a $20.8-million non-cash goodwill impairment loss, resulting in a $4.9-million adjusted net loss. GK’s potential sale could eventually stop the balance sheet from reducing its market.
Even the Talent Development Solutions (TDS) took a hit. However, it resulted in only a 2% year-over-year dip in its revenues due to a decline in B2C learner products. The CFO of the company remarked that the deterioration in GK’s performance masked TDS enterprise stabilization.
Having said that, management is pretty optimistic about the future of AI and how it pans out for the company. Percipio platform, riding on the AI-native roadmap of the company, witnessed early success as demonstrated by the signing of its first four large enterprise customers.
The decision not to provide revenues and adjusted EBITDA outlook for the GK segment while reaffirming the TDS segment’s guidance is a clear indication that management is inclined to evaluate its digital subscription business solely. While the expectation of a positive free cash flow may not be fulfilled soon, a strategic divorce from the GK segment may only have a positive impact on the business, putting it on the right path.
Skillsoft’s Outstanding Capital Return
Return on equity (ROE) is a profitability metric that assesses how effectively a company utilizes shareholders' equity to generate earnings. By the end of the third quarter of fiscal 2026, SKIL’s ROE was 83.1%, beating the industry’s 15.3%.
Return on invested capital (ROIC) highlights a company’s efficacy in deploying total capital to generate operating profits. In the case of Skillsoft, it stands at 11.6%, below the industry’s 7.7%.
SKIL Trades Cheaper Than the Industry
Skillsoft is trading at 1.76 times forward 12-month price-to-earnings, significantly below the industry average of 26.05 times. Its trailing 12-month EV-to-EBITDA ratio stands at 2.55, below the industry average of 18.29. Being discounted on both counts is a major green flag for value-oriented investors as it suggests potential upside in the long haul.
Buy Skillsoft Now
SKIL presents a compelling turnaround narrative focusing on its pivot from the GK business segment. Management’s decision to conduct a strategic review for alternatives to the GK segment is critical for its growth. By shedding this segment, the company can concentrate on its core TDS segment and its AI-backed Percipio platform.
Skillsoft generates strong capital returns, as evidenced by its ROE and ROIC, which outpaced the industry average. We recommend investors buy this stock now as the company trades at a discount compared with its industry, making it an attractive option for investors seeking to draw in high returns as the market realizes its true potential.
Skilsoft flaunts a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.