Critical Survey: Skillz (NYSE:SKLZ) and NerdWallet (NASDAQ:NRDS)

Skillz (NYSE:SKLZ) and NerdWallet (NASDAQ:NRDS) are both small-cap consumer discretionary companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, institutional ownership, risk, dividends, earnings, profitability and analyst recommendations.

Risk & Volatility

Skillz has a beta of 2.78, suggesting that its stock price is 178% more volatile than the S&P 500. Comparatively, NerdWallet has a beta of 1.43, suggesting that its stock price is 43% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations for Skillz and NerdWallet, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Skillz	0	2	2	0	2.50
NerdWallet	0	2	4	0	2.67

Skillz presently has a consensus price target of $10.67, indicating a potential upside of 88.62%. NerdWallet has a consensus price target of $16.00, indicating a potential upside of 27.19%. Given Skillz’s higher possible upside, equities analysts clearly believe Skillz is more favorable than NerdWallet.

Valuation and Earnings

This table compares Skillz and NerdWallet”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Skillz	$150.11 million	0.66	-$101.36 million	($5.11)	-1.11
NerdWallet	$599.00 million	1.63	-$11.80 million	($0.17)	-74.00

NerdWallet has higher revenue and earnings than Skillz. NerdWallet is trading at a lower price-to-earnings ratio than Skillz, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

19.4% of Skillz shares are owned by institutional investors. Comparatively, 38.8% of NerdWallet shares are owned by institutional investors. 22.7% of Skillz shares are owned by company insiders. Comparatively, 45.9% of NerdWallet shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Skillz and NerdWallet’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Skillz	-47.40%	-43.56%	-22.71%
NerdWallet	-1.85%	-2.98%	-2.56%

Summary

NerdWallet beats Skillz on 11 of the 14 factors compared between the two stocks.

About Skillz

Skillz Inc. operates a mobile game platform in the United States and internationally. The company primarily develops and supports a proprietary online-hosted technology platform that enables independent game developers to host tournaments and provide competitive gaming activity to end-users. The company distributes games through direct app download from its website, as well as through third-party platforms. Skillz Inc. was founded in 2012 and is based in San Francisco, California.

About NerdWallet

NerdWallet, Inc. operates a digital platform that provides consumer-driven advice about personal finance by connecting individuals and small and mid-sized businesses with financial products providers in the United States, the United Kingdom, Australia, and Canada. Its platform offers guidance to consumers through educational content, tools and calculators, and product marketplaces, as well as through NerdWallet app for various financial products, including credit cards, mortgages, insurance, SMB products, personal loans, banking, investing, and student loans. The company was founded in 2009 and is based in San Francisco, California.