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The Zacks Consensus Estimate for earnings in the to-be-reported quarter is pegged at $1.27, indicating a 39.8% plunge from the year-ago reported quarter. The consensus estimate for total revenues is pinned at $130.2 million, implying a 2.7% year-over-year decline. There has been no change in analyst estimates or revisions lately.
Image Source: Zacks Investment Research
The company has an impressive earnings surprise history. Over the four trailing quarters, it surpassed the Zacks Consensus Estimate, with an average surprise of 122.3%.
SKIL’s Lesser Chance of Q4 Earnings Beat
Our proven model does not conclusively predict an earnings beat for Skillsoft this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Strategic Pivot From GK to Have Been SKIL’s Driver in Q4
The strategic split from the Global Knowledge (GK) segment is anticipated to impact the balance sheet due to market reduction. Management is expected to continue betting on the Talent Development Solutions (TDS) segment despite its decline in revenues over the past quarters. Our expectation is backed by the company’s rapid investment in the Percipio platform, which has shown signs of early success by drawing in the first four large enterprise customers.
It appears that management is more inclined toward continuing the operations of the TDS segment, which, when combined with the elimination of the GK segment, is expected to provide a positive impetus to the business.
SKIL Stock Plunges, Trades Cheaper Than Industry Peers
Skillsoft shares have plummeted 71.2% in a year against the 32% rise of its industry and the 35.7% rally of the Zacks S&P 500 composite.
SKIL’s industry peers Gen Digital Inc. (GEN - Free Report) and Amplitude (AMPL - Free Report) have declined as well over the past year. Gen Digital and Amplitude have dipped 18.8% and 23.5%, respectively.
1-Year Share Price Performance
Image Source: Zacks Investment Research
Skillsoft is currently trading at a trailing 12-month price-to-earnings ratio of 0.93X, lower than Gen Digital’s and Amplitude’s 6.48X and 54.43X, respectively.
P/E - F12M
Image Source: Zacks Investment Research
Skillsoft’s Investment Considerations
SKIL’s future appears to be dependent on how management plays the GK segment, since shedding this segment raises the TDS segment to shine. Percipio has become a vital cog in the company’s growth engine. The company recently announced the availability of its next-gen Skillsoft Percipio platform, highlighting the increasing demand among enterprises for a stronger connection between learning, skills development and business performance. SKIL can bet on Percipio to slide into the skills intelligence domain from the commoditized content market.
The stock provides solid capital returns as evidenced by an 83.1% return on equity, which is significantly higher than the industry’s 15.5%. While the stock has tanked over the past year, an attractive valuation provides investors with hope to secure robust returns as the market recognizes its real value.
On the flip side, Skillsoft’s liquidity position is highly questionable. Its current ratio stands at 0.84, which is substantially lower than the industry’s 1.59. This position of being lower than 1 is not a one-off event, but rather a position held across the past several quarters. It provides clear evidence of SKIL’s inability to pay off short-term debt efficiently.
Hold Skillsoft This Earnings Seasons
Skillsoft offers a compelling risk-reward profile, backed by a cheap valuation and a strategic pivot from the GK segment. While the chances of an earnings beat appear bleak, one must not ignore the fantastic average earnings surprise held by the company. The Percipio platform can help Skillsoft transition from commoditized content to the skills intelligence domain. A robust capital return profile signals optimism to shareholders.
Amid these positives, real challenges lie within the company’s liquidity portfolio, which has not displayed any positive signs over the past multiple quarters. The fundamentals appear weak, which is another major red flag.
Hence, we urge shareholders to retain the stock for now, and potential investors are recommended to remain cautious and observe whether the adoption of Percipio exceeds expectations post the earnings release.
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Here's How to Play Skillsoft Stock Before Q4 Earnings Release
Key Takeaways
Skillsoft (SKIL - Free Report) will report fourth-quarter 2026 results on April 7, after market close.
The Zacks Consensus Estimate for earnings in the to-be-reported quarter is pegged at $1.27, indicating a 39.8% plunge from the year-ago reported quarter. The consensus estimate for total revenues is pinned at $130.2 million, implying a 2.7% year-over-year decline. There has been no change in analyst estimates or revisions lately.
The company has an impressive earnings surprise history. Over the four trailing quarters, it surpassed the Zacks Consensus Estimate, with an average surprise of 122.3%.
SKIL’s Lesser Chance of Q4 Earnings Beat
Our proven model does not conclusively predict an earnings beat for Skillsoft this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
SKIL has an Earnings ESP of 0.00% and a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Strategic Pivot From GK to Have Been SKIL’s Driver in Q4
The strategic split from the Global Knowledge (GK) segment is anticipated to impact the balance sheet due to market reduction. Management is expected to continue betting on the Talent Development Solutions (TDS) segment despite its decline in revenues over the past quarters. Our expectation is backed by the company’s rapid investment in the Percipio platform, which has shown signs of early success by drawing in the first four large enterprise customers.
It appears that management is more inclined toward continuing the operations of the TDS segment, which, when combined with the elimination of the GK segment, is expected to provide a positive impetus to the business.
SKIL Stock Plunges, Trades Cheaper Than Industry Peers
Skillsoft shares have plummeted 71.2% in a year against the 32% rise of its industry and the 35.7% rally of the Zacks S&P 500 composite.
SKIL’s industry peers Gen Digital Inc. (GEN - Free Report) and Amplitude (AMPL - Free Report) have declined as well over the past year. Gen Digital and Amplitude have dipped 18.8% and 23.5%, respectively.
1-Year Share Price Performance
Skillsoft is currently trading at a trailing 12-month price-to-earnings ratio of 0.93X, lower than Gen Digital’s and Amplitude’s 6.48X and 54.43X, respectively.
P/E - F12M
Skillsoft’s Investment Considerations
SKIL’s future appears to be dependent on how management plays the GK segment, since shedding this segment raises the TDS segment to shine. Percipio has become a vital cog in the company’s growth engine. The company recently announced the availability of its next-gen Skillsoft Percipio platform, highlighting the increasing demand among enterprises for a stronger connection between learning, skills development and business performance. SKIL can bet on Percipio to slide into the skills intelligence domain from the commoditized content market.
The stock provides solid capital returns as evidenced by an 83.1% return on equity, which is significantly higher than the industry’s 15.5%. While the stock has tanked over the past year, an attractive valuation provides investors with hope to secure robust returns as the market recognizes its real value.
On the flip side, Skillsoft’s liquidity position is highly questionable. Its current ratio stands at 0.84, which is substantially lower than the industry’s 1.59. This position of being lower than 1 is not a one-off event, but rather a position held across the past several quarters. It provides clear evidence of SKIL’s inability to pay off short-term debt efficiently.
Hold Skillsoft This Earnings Seasons
Skillsoft offers a compelling risk-reward profile, backed by a cheap valuation and a strategic pivot from the GK segment. While the chances of an earnings beat appear bleak, one must not ignore the fantastic average earnings surprise held by the company. The Percipio platform can help Skillsoft transition from commoditized content to the skills intelligence domain. A robust capital return profile signals optimism to shareholders.
Amid these positives, real challenges lie within the company’s liquidity portfolio, which has not displayed any positive signs over the past multiple quarters. The fundamentals appear weak, which is another major red flag.
Hence, we urge shareholders to retain the stock for now, and potential investors are recommended to remain cautious and observe whether the adoption of Percipio exceeds expectations post the earnings release.