Skillsoft Corp.

Skillsoft Corp. (NYSE: SKIL) is a provider of corporate digital learning. The Company operates through two segments: Skillsoft content and Global Knowledge. The Skillsoft content segment engages in the sale, marketing, and delivery of its content learning solutions, in areas such as leadership and business, technology, and developer and compliance.

Recent Financial and Business Updates:

• Fiscal 2024 First Quarter Select Metrics and Financials from Continuing Operations:
  

• Content & Platform segment Bookings increased by 9% on a constant currency basis. However, Total Bookings declined by 4% on a constant currency basis due to an 18% constant currency decrease in Instructor-Led Training segment Bookings.
• GAAP Revenue reached USD 136 million, indicating a growth of 1%. The Content & Platform segment GAAP Revenue recorded significant growth of 10% to USD 99 million. However, the Instructor-Led Training segment GAAP Revenue experienced a decline of 18% to USD 37 million.
• On a Pro Forma constant currency basis, Content & Platform segment Revenue showed growth of 2%, while total Revenue declined by 3%, mainly due to a 14% decrease in Instructor-Led Training segment Revenue.
• The company reported a GAAP Net Loss of USD 44 million, compared to a loss of USD 22 million in the previous year. Adjusted EBITDA from continuing operations amounted to USD 22 million, representing a 13% increase on a Pro Forma constant currency basis, with a margin of 16% of GAAP Revenue.
• The company repurchased 4.4 million shares under its USD 30 million share repurchase program, demonstrating a commitment to returning value to shareholders.
• As of the end of the first quarter, the company held USD 178 million of cash and cash equivalents, indicating a solid liquidity position.
• Fiscal 2024 First Quarter Business Highlights:
  

• The LTM Content & Platform Dollar Retention Rate rose to approximately 101% in the quarter, up from approximately 98% in the year-ago period. Moreover, the Quarterly Content & Platform Dollar Retention Rate increased to approximately 108%, compared to approximately 101% in the year-ago period.
• The company launched a pioneering generative AI course featuring eight modules covering various topics such as ChatGPT use cases, practical ethical AI concepts, and ChatGPT prompt engineering, among others, to enhance the learning experience for its users.
• Codecademy Plus, a new subscription product focusing on upskilling and continuous career development, was introduced to the market, and upgraded features were added to Codecademy Pro, providing learners with real-time coding exercises, professional certifications, and career advice to prepare them for entry-level technology careers.
• The company released the annual Lean into Learning report, examining the state of digital learning, as well as the most in-demand skills and competencies for the future of work. Additionally, the 2023 Women in Tech Report explored the top challenges and opportunities for women in the technology industry, addressing important diversity and inclusion aspects.
• Skillsoft's learning solutions were recognized in commissioned studies by Forrester Consulting, showing substantial benefits and Total Economic Impact™. The Leadership & Business, Technology & Developer, and Compliance solutions achieved ROIs of 263%, 274%, and 317%, respectively, over a three-year span, underscoring the effectiveness and value of the company's offerings.

Technical Observation (on the daily chart)

The price of SKIL stock has been consolidating in the range between both the trendlines, with the current price near the downward sloping trendline. Currently, the stock is near an important resistance around USD 1.50, from where price has taken supports and resistances in the past. A breakout in upward direction from this range would likely initiate a new short-term trend in the up direction with targets of USD 1.80-USD 2.00. The RSI (14 period) momentum indicator is at a value of 56.31, with expectations of some consolidation or a continuation of the current upward momentum. Moreover, the price is currently positioned above both the 21-day SMA and 50-day SMA trend-following indicators, which may act as dynamic short-term support levels.

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As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Watch’ rating has been given to Skillsoft Corp. (NYSE: SKIL) at the closing price of USD 1.46 as of July 18, 2023, with further analysis once price breaks the mentioned trendlines on the chart.

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario. 

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing. 

Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc. 

How to Read the Charts?

The Green colour line reflects the 21-period simple moving average (SMA) while the red line indicates the 50- period simple moving average (SMA). SMA helps to identify existing price trends. If the prices are trading above the 21-period and 50-period moving average, then it shows prices are currently trading in a bullish trend.

The Black colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.

The Blue colour bars in the chart’s lower segment show the volume of the stock. The volume is the number of shares that changed hands during a given day. Stocks with high volumes are more liquid than stocks with lesser volume as liquidity in stocks helps in easier and faster execution of the order.

The Orange colour lines are the trend lines drawn by connecting two or more price points and used for trend identification purposes. The trend line also acts as a line of support and resistance.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock. 

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock. 

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices. 

The reference date for all price data, currency, technical indicators, support, and resistance levels is July 18, 2023. The reference data in this report has been partly sourced from REFINITIV. 

Abbreviations

CMP: Current Market Price

SMA: Simple Moving Average

RSI: Relative Strength Index

USD: United States dollar 

Note: Trading decisions require a thorough analysis by individual. Technical reports in general chart out metrics that may be assessed by individuals before any stock evaluation. The above are illustrative analytical factors used for evaluating the stocks; other parameters can be looked at along with additional risks per se. Past performance is neither an indicator nor a guarantee of future performance.

Disclaimer

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