Is SKLZ Stock a Solid Long Term Investment?
Skillz is a gaming company that has been getting the attention of investors for some time, seemingly for all the right reasons. There are actually a number of things about the company that make them different and that makes them stand out. Mobile gaming companies aren’t exactly the first things that usually come to your mind when you’re thinking about a long-term investment option. That’s because the overwhelming majority of them are far too volatile to even be considered for such things. However, this company is different, as previously mentioned. The truth of the matter is that there are so many positive differences that a lot of investors have been taking a very serious look at the company as a potential long-term investment option. In order for you to decide whether or not it should be something in your portfolio, it’s important to take a closer look at several points so you can make an educated choice about whether or not this stock could potentially be right for you.
One thing that makes this company stand out as the fact that they’re not exactly new to doing business. In fact, they were founded in 2012, making them almost 10 years old. That fact in and of itself is something that is worth noting, especially in the world of mobile gaming companies. These companies have a tendency to come and go. Only the very best of them are capable of having any type of staying power whatsoever. That’s why, when you think of gaming companies, you can typically only think of two or three. It’s largely because they have cornered the market and they’re the only ones that are still around when it’s all said and done. To have one that doesn’t fall into that category is enough to at least get your attention long enough to see what they’re all about because you have to start asking yourself what they’re doing differently that has allowed them to not only survive, but thrive over the course of the last decade.
There is something else about this company that makes them entirely different from every other gaming company out there. They don’t handle their finances in the same way that the other gaming companies do. In fact, their structure is completely different when compared to everyone else in the industry. As opposed to hiring a bunch of video game developers and paying them wages that they may or may not be able to afford in order to develop new games, they have an entirely different business model that allows them to compete with the big boys without having the type of overhead that virtually everyone else in the business experiences. That’s largely because they use a business model that is a lot closer to a crowdsourcing model than anything else. As opposed to going after the best video game developers and trying to lure them over from other companies, they created a unique system years ago that’s designed to bring freelance video game developers together with people who are willing to provide financial backing. Like most companies that operate on this type of business model, their system is set up so that they share in a certain percentage of the profits when someone develops a successful game.
What does all of this mean for their bottom line? In short, it means that they have a lot more leeway when it comes to creating something because they’re not tied down to one or two projects at a time. It also means that the number of projects they can work on at any given time is not dictated by the number of staff members that they have working on a full-time basis. They have to spend less in order to keep the lights on because their business model is designed to operate on a fraction of what it costs to operate in a more traditional manner. That means they can put more money toward developing games and marketing strategies. It also means that there are more options and additional material that usually comes from this company because their business model alone is set up to attract more people. They may not have the best selling game of the year, but they might make more money than the company that does have the best selling game because they have five times as much material coming out in the same time span.
Deciphering Their Performance in the Stock Market
So, how does all of this translate to their performance in the stock market? For the last 22 quarters, it has translated to them having some exceptional performance. In fact, they have seen consistent growth in their performance for the past 22 quarters, with each quarter being better than the one before it. That’s something that most companies can only pull off in their wildest dreams, and even then it’s a stretch. The fact that one is actually able to get the job done says a great deal for the way the company is managed and the type of financial performance that they are capable of seeing. That is precisely why so many investors have been paying attention to the company. At a time when major gaming companies are struggling to make ends meet, this company is not only covering all of their costs, but making a profit that exceeds the one they made in the previous quarter. Considering the fact that they’ve been doing that for more than five years, their stock is definitely worth looking into. After all, they’ve already proven that over the course of several years, their stock could potentially pay off. Think about it this way. Someone that purchased stock in the company four or five years ago was able to purchase that stock for next to nothing and they now have an opportunity to sell it for many times more than they actually paid for it. If you’re intrigued, it’s time to get down to the numbers so you can see exactly what type of potential profits you could be making, provided you choose to use the stock as one of your own long-term options.
A Low Cost Stock With Genuine Potential
There are obviously a lot of reasons that so many people are rather fond of this particular stock. That doesn’t mean that it doesn’t see its fair share of ups and downs in the stock market. As a matter of fact, it’s experiencing one of those lows right now and is currently selling for less than it has in the previous 52 weeks. That said, having a few ups and downs isn’t always a bad thing. The truth of the matter is that when it comes to the stock market, every stock is going to experience something of a roller coaster effect. It’s simply unavoidable. So far, this is a stock that has proven that it has some staying power, which is absolutely crucial for anything that you plan to purchase as a long-term investment. The fact that it’s currently being sold for roughly $10 a share may seem like a negative aspect, but you might be missing the boat. There is every indication that the stock will eventually go back up. As a matter of fact, many experts believe that it is currently primed to do exactly that because as far as they’re concerned, it has essentially bottomed out. There is no indication whatsoever that the company itself is on the way out, so one would have to conclude that the stock will eventually go back up. The fact that you can currently purchase shares for only $10 each could be a tremendous benefit. Imagine the potential in something that you can purchase for so little money and then hold onto until it becomes worth several times that amount at some point in the future. This is fairly likely to happen, even if you only plan on holding on to it for the next 12 to 24 months. Imagine the potential to make money if you can hold on to it for five or six years, choosing to sell whenever the stock reaches a high point and you decide that it’s a good time to do so.
The Potential for Success
There are many reasons that this stock could potentially start outperforming itself yet again. For starters, the company has been spending a lot of money as of late. After all, they are a tech company and they have to spend a certain amount of money in order to keep things up-to-date and stay current with regard to their competition as well as the market. Otherwise, they become obsolete. It’s important not to get too hung up on that fact because there are plenty of tech companies out there that spend a lot more money than they do. In fact, there are very few tech companies that actually turn a profit on a consistent basis. That’s because technology is constantly evolving and that necessitates a need to constantly update practices, equipment and staff members. All of this costs money. When you look at this particular stock and compare it to other stocks in the same sector, they’re still outperforming their competition even though they haven’t made a profit in some time. That means that they may very well be a good option for a long-term investment, especially if you want a tech company in your portfolio, yet you’ve been lost on which one to choose. You obviously want to choose the one that imposes the least amount of risk and that is exactly what you’re getting here.
Signs of Recovery
It’s also worth noting that the company is currently up by 66% over this same point in time last year. That fact alone tells you that they’re moving in the right direction. When you consider the fact that management can also look at every point where the company has lost money and provide a detailed, bona fide answer for why it happened and how they plan to fix it, the company seems even more solid. That doesn’t mean that you’re going to see their stock go up overnight, but it certainly does indicate a strong possibility that it will be going up at some point in the relatively near future. Whether that takes several weeks or a number of months remains to be seen. However, you’re considering buying it for a long-term option, not something that you want to use to turn a profit within a week. Therefore, they remain a solid option for a long-term investment because there is every indication that the stock will go up exponentially in the coming months. One thing that this particular company has going for it that also sets it apart from its competition is the fact that management keeps a watchful eye on company expenditures and works actively to keep those expenditures to a minimum. They don’t have a tendency to spend a lot of money on marketing. As previously mentioned, they don’t go out and court someone from another tech company by promising them a six-figure salary and lavish gifts. Instead, they rely on crowdsourcing and freelance game developers to keep them in the fight and it’s something that has proven to be extremely successful over the years. There’s no reason to believe that they’re going to be any less successful than they have been in the past, but there is every reason to believe that they will only continue to grow and prosper as time passes.
At the end of the day, you have to make your own choices regarding your portfolio and what you choose to use as a long-term investment. There is a certain amount of risk involved with any stock market investment, especially when you start talking about tech companies. However, there are certain steps that you can take to mitigate your risk and if you play your cards right, you stand to benefit from a rather sizable payday at some point in the future. This is one particular stock that a lot of experts would probably recommend that you consider. That’s because when it comes to playing the cards, this company seems to be playing all of their own just right, too.