Why Skillz Stock Sank This Week
As of the market close on Thursday, shares of Skillz (NYSE: SKLZ) had fallen by 11% this week. But if you search for news, filings with the Securities and Exchange Commission (SEC), or even analyst commentaries, you won't find anything that explains why.
Rather, it seems Skillz stock fell simply because it's a volatile investment.
Skillz, which operates a platform that brings mobile gamers and developers together, is a high-growth company. In 2020, its revenue surged 92% to $230 million. And revenue for the first quarter of 2021 was also up 92% year over year to $84 million. Those impressive top-line gains and its stellar 95% gross-profit margin have attracted a fair number of bulls to the stock. As a result, it's trading at a lofty valuation of 25 times trailing sales. For perspective, mature companies often trade between 1 and 2 times trailing sales.
Source Fool.com
