Growth stocks are in general going through a volatile time this year. Many growth stocks also benefited from the stay-at-home pandemic trend. Now that economies are restarting, the attention of investors is changing to stocks that could gain as consumers start traveling again.
That does not totally explain why these two growing stocks have catapulted down by over 20% this year, but it does start to reveal the story. Nevertheless, each of these stocks has good long-term possibility that have improved. Let’s look at why you should think about each one of these down-trodden growth stocks.
Skillz is a gaming system on a large growth trajectory. It is unique because it gives players the chance to place bets on the games they are playing. The wager ability makes them more interesting than other games. The outcome of the game has the benefit of winning prize money.
Importantly, it takes Skillz far less money to get customers than the money it gets from them. Indeed, from 2018 to 2020, lifetime customer value went higher than the expense of getting them by 3.8 times. That gives room for Skillz to use more money to acquire new customers to power its profits. More players leads to more developers being interested in allowing their games to be compatible with the platform.
Penn National Gaming
Penn National Gaming was hit hard during the covid pandemic when it had to close down its land-based casinos. It is coming back after reopening and revenue is almost back to 2019 numbers. And Penn is not exposed to the convention market in the same way Las Vegas casinos are, so there will be no long-term damage from lowered travel.
The online sportsbook is just only now getting started, with 400,000 total players. Compare that to its competitor, DraftKings, which has signed up almost 1.5 million monthly players. Given that Penn has the increased advantage of land-based casinos to bring in online players, it might surpass DraftKings over time. And so it is a much better bet for investors who want growth, and want it for cheap.
Author: Scott Dowdy