Skillz Inc. (NYSE:SKLZ), a technology company specializing in computer processing and data preparation, has reapproved a share repurchase program as announced on Thursday.
The board of directors has authorized the company to buy back up to $41.1 million of its Class A common stock, representing nearly 42% of the company's current market capitalization of $98.72 million, with no set expiration date for the program.
According to InvestingPro data, the company maintains strong liquidity with a current ratio of 5.8, indicating substantial financial flexibility for this initiative.
The repurchase program, which continues from the company's previous initiative, allows Skillz to repurchase shares through open market transactions, privately negotiated deals, or other methods. These may include trading plans that comply with Rule 10b5-1 under the Securities Exchange Act of 1934, subject to applicable laws and other constraints. InvestingPro analysis reveals the company maintains impressive gross profit margins of 87.17%, though revenue has declined by 36.73% over the last twelve months.
The execution of the buyback program is at the discretion of management and will depend on various factors, including market conditions, stock prices, and trading volumes. Skillz has indicated that it may fund the repurchases using its existing cash and cash equivalents.
The company's announcement also contains forward-looking statements, cautioning that actual results could vary significantly due to numerous risks and uncertainties.
Factors that could influence the outcome include those beyond the company's control and are difficult to predict, as detailed in the "Risk Factors" section of Skillz's Annual Report for the year ended 2023 and subsequent SEC filings.
InvestingPro subscribers can access comprehensive analysis including 8 additional ProTips and detailed financial metrics in the Pro Research Report, which indicates the stock is currently trading below its Fair Value.
Skillz has not committed to acquiring any specific number of shares and may suspend or discontinue the program at any time. The decision to reauthorize the stock repurchase program reflects the board's ongoing assessment of capital allocation strategies and its consideration of what it believes to be in the best interests of Skillz shareholders.
This report is based on a press release statement and includes information from the company's filing with the Securities and Exchange Commission.
In other recent news, Skillz Inc. has made significant strides in its financial performance, despite facing some challenges. Stifel recently revised the company's stock price target to $6, maintaining a Buy rating. This adjustment was made following Skillz's third-quarter earnings report, which highlighted a year-over-year improvement in adjusted EBITDA loss, now standing at $13.9 million, and a revenue of $25 million, marking a 33% decrease from the previous year.
Stifel anticipates that Skillz will face a larger adjusted EBITDA loss in 2024, estimated to be $57 million. However, the firm's analysis suggests that the company's financial situation may improve by 2025, with an expected 15% year-over-year increase in revenue to $114 million.
Skillz is actively working on compliance with NYSE listing standards and finalizing its unaudited interim financial statements. The company's CEO, Andrew Paradise, remains confident in Skillz's path to consistent growth and profitability by 2025, with strategies in place to enhance the platform and optimize user acquisition spending.
Skillz is also exploring publishing deals to increase revenue share and support marketing budgets for promising games. These recent developments indicate the company's commitment to strategic financial discipline and growth.
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