Motorsport Games (MSGM) AI Stock Analysis

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Motorsport Games

(NASDAQ:MSGM)

48Neutral

Motorsport Games' overall score reflects significant financial difficulties with persistent losses and high leverage weighing heavily. There are signs of recovery potential from recent revenue growth, successful product launches, and favorable corporate developments. However, caution is advised due to mixed technical indicators and challenging valuation.

Motorsport Games (MSGM) vs. S&P 500 (SPY)

Market Cap

$14.56M

Dividend YieldN/A

Average Volume (3M)1.55M

Price to Earnings (P/E)0.8

Beta (1Y)-0.79

Revenue Growth25.73%

EPS Growth82.50%

CountryUS

Employees22

SectorCommunication Services

Sector Strength81

IndustryElectronic Gaming & Multimedia

Share Statistics

EPS (TTM)-0.92

Shares Outstanding5,078,450

10 Day Avg. Volume444,689

30 Day Avg. Volume1,553,511

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.00

Price to Cash Flow (P/CF)0.00

P/FCF Ratio0.00

Enterprise Value/Market Cap0.29

Enterprise Value/RevenueN/A

Enterprise Value/Gross Profit0.78

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

Motorsport Games Business Overview & Revenue Model

Company DescriptionMotorsport Games (MSGM) is a prominent developer, publisher, and esports ecosystem provider specializing in the domain of racing video games and esports events. The company focuses on creating immersive and authentic racing experiences for motorsport enthusiasts through various digital platforms. Its portfolio includes officially licensed games from renowned racing series such as NASCAR, Le Mans, and the British Touring Car Championship, offering both single-player and multiplayer experiences.

How the Company Makes MoneyMotorsport Games generates revenue through several key streams. Primarily, it earns money from the sale of its video games across various platforms including PC, console, and mobile devices. In addition to direct sales, the company benefits from in-game purchases and downloadable content (DLC) that enhance the gaming experience. Motorsport Games also capitalizes on esports by organizing and promoting racing competitions, which can generate income through sponsorships, broadcasting rights, and event entry fees. Significant partnerships with major racing organizations and brands further bolster its revenue by providing exclusive rights to develop games based on popular racing series.

Motorsport Games Financial Statement Overview

Summary

Motorsport Games faces significant financial headwinds characterized by persistent losses, high leverage, and cash flow challenges. While there are some positive signs in gross profit margins and slight improvements in cash management, overall stability and profitability remain concerns. The company needs to focus on enhancing operational efficiency and reducing financial leverage to improve its financial health.

Income Statement

Neutral

Motorsport Games has struggled to maintain consistent revenue growth, with revenue declining from 2020 to 2021 and then improving slightly in subsequent years. The company has consistently posted negative net income, indicating ongoing profitability challenges. While gross profit margin has shown some resilience, EBIT and EBITDA margins remain weak, reflecting operational inefficiencies.

Balance Sheet

Negative

The balance sheet shows high leverage with a fluctuating but generally negative stockholders' equity, indicating financial instability. The debt-to-equity ratio is concerning, though it has improved slightly with decreased total debt. The company's equity ratio is weak, reflecting a low proportion of equity financing relative to total assets.

Cash Flow

Negative

Cash flow management remains a significant challenge, as indicated by consistently negative operating and free cash flows. The operating cash flow to net income ratio suggests inefficiencies in converting income into cash flow. While there has been some improvement in free cash flow growth, overall cash flow performance is poor, necessitating further improvements in operational efficiency.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
8.69M	6.91M	10.32M	15.08M	19.05M
	Gross Profit
5.46M	3.29M	5.36M	7.55M	12.45M
	EBIT
-1.75M	-19.41M	-25.41M	-34.21M	38.98K
	EBITDA
-337.88K	-11.43M	-33.20M	-31.42M	757.82K
	Net Income Common Stockholders
-2.75M	-13.05M	-47.42M	-34.99M	-2.51M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
859.27K	1.68M	979.31K	17.82M	3.99M
	Total Assets
6.27M	9.76M	18.90M	50.70M	17.39M
	Total Debt
47.41K	198.67K	997.83K	119.02K	10.85M
	Net Debt
-811.86K	-1.48M	18.52K	-17.70M	6.86M
	Total Liabilities
5.04M	7.67M	16.99M	12.72M	15.77M
	Stockholders Equity
496.26K	3.04M	1.53M	36.72M	-1.03M
Cash Flow		Free Cash Flow
-2.86M	-13.71M	-19.81M	-21.92M	3.82M
	Operating Cash Flow
-2.84M	-12.92M	-19.52M	-20.94M	4.05M
	Investing Cash Flow
1.18M	4.21M	-292.45K	-14.61M	-480.96K
	Financing Cash Flow
834.05K	9.94M	1.71M	49.26M	-1.54M

Motorsport Games Technical Analysis

Technical Analysis Sentiment

Positive

Last Price2.52

Price Trends

50DMA

1.41

Positive

100DMA

1.36

Positive

200DMA

1.37

Positive

Market Momentum

MACD

0.38

Negative

RSI

68.91

Neutral

STOCH

54.29

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MSGM, the sentiment is Positive. The current price of 2.52 is above the 20-day moving average (MA) of 1.76, above the 50-day MA of 1.41, and above the 200-day MA of 1.37, indicating a bullish trend. The MACD of 0.38 indicates Negative momentum. The RSI at 68.91 is Neutral, neither overbought nor oversold. The STOCH value of 54.29 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MSGM.

Motorsport Games Risk Analysis

Motorsport Games disclosed 70 risk factors in its most recent earnings report. Motorsport Games reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Motorsport Games Peers Comparison

Overall Rating

UnderperformOutperform

Sector (59)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	59 Neutral	$13.76B	7.65	-2.18%	3.85%	2.32%	-36.56%
MSGM	48 Neutral	$14.56M	0.76	-175.34%	―	25.73%	82.50%
DLPN	47 Neutral	$12.56M	―	-79.76%	―	19.85%	41.89%
SLE	41 Neutral	$6.45M	―	-324.29%	―	-35.48%	79.53%
VSME	31 Underperform	$8.36M	―	-157.27%	―	―	―
TC	30 Underperform	$1.76M	―	-425.84%	―	―	―

* Communication Services Sector Average

Performance Comparison

MSGM

Motorsport Games

2.52

0.25

11.01%

DLPN

Dolphin Entertainment

1.12

-1.24

-52.54%

TuanChe

0.57

-1.55

-73.11%

SLE

Super League Enterprise

0.36

-1.03

-74.10%

VSME

VS Media Holdings Limited Class A

0.88

-1.79

-67.04%

Motorsport Games Earnings Call Summary

Earnings Call Date:Mar 20, 2025

(Q4-2024)

% Change Since: 106.56%|

Next Earnings Date:May 19, 2025

Earnings Call Sentiment Neutral

The earnings call highlighted significant achievements, such as the success of Le Mans Ultimate, the launch of a profitable subscription service, and positive legal and financial settlements. However, these are tempered by financial challenges, including a large net loss and concerns over cash position and future funding. Despite these challenges, the company shows strong potential for growth and recovery.

Q4-2024 Updates

Positive Updates

Le Mans Ultimate Success

Le Mans Ultimate showed strong potential with positive reception from consumers and industry influences. A significant update in December sparked a surge in player numbers to levels not seen since the initial launch. The game is being compared favorably to industry giants and has captivated a rapidly growing audience.

Launch of Subscription Service

The new subscription service launched in December via racecontrol.gg generated over $120,000 in gross revenues within the first 21 days and is close to 6,000 active subscribers, showing strong early adoption.

Revenue Increase

Revenues for the fourth quarter were $2.0 million, a 13% increase compared to the same period in the prior year, primarily driven by higher digital game sales from the release of Le Mans Ultimate.

Settlement with Luminis

A settlement with Luminis improved the financial position by $180,000, clearing remaining barriers to full ownership of Studio 397 and their original technology contribution to Le Mans Ultimate.

Positive Legal Ruling

A positive ruling was received in the Innovate Corporation litigation, securing a summary judgment in Motorsport Games' favor on all counts, potentially alleviating some legal fee liabilities.

Negative Updates

Net Loss Increase

Net loss for the fourth quarter of 2024 was $2.9 million, compared to net income of $2.7 million for the same period in the prior year, a decrease of $5.6 million.

Cash Position and Funding Concerns

As of December 31, 2024, the company had cash and cash equivalents of $0.9 million, which increased to $1.2 million by February 28, 2025. However, there is insufficient cash on hand to fund operations over the next year, necessitating additional funding.

Adjusted EBITDA Loss

Reported an adjusted EBITDA loss of $2.5 million for the fourth quarter of 2024, compared to an adjusted EBITDA of $0.4 million for the same period in the prior year.

Company Guidance

During the Motorsport Games Inc.'s fourth quarter and full year 2024 earnings call, key metrics highlighted included revenues for the quarter at $2.0 million, a 13% increase from the previous year, primarily driven by digital game sales of Le Mans Ultimate. Despite the revenue increase, the company reported a net loss of $2.9 million for the quarter, compared to a net income of $2.7 million in the prior year, largely due to a $2.2 million increase in other expenses. The full year 2024 revenues reached $8.7 million, up by $1.8 million, attributed to the sales of Le Mans Ultimate. The adjusted EBITDA loss was $2.5 million for the fourth quarter and $3.9 million for the full year, reflecting improvements from previous years. The company reported a net cash used in operations of $2.8 million for the year, with an average monthly net cash burn of $0.2 million, indicating a reduction from the previous year's $1.1 million. Cash and cash equivalents stood at $1.2 million as of February 28, 2025, with the company actively exploring funding options to address future cash shortfalls.

Motorsport Games Corporate Events

Executive/Board ChangesPrivate Placements and Financing

Motorsport Games Appoints New Board Director

Positive

Apr 22, 2025

On April 10, 2025, Motorsport Games appointed Guoquan (Paul) Huang to its board of directors as a Class II director, following the completion of a Private Placement and a background check. Mr. Huang, an esteemed academic with expertise in robotics and AI, brings significant experience in nonlinear estimation and spatial computing, which could enhance the company’s technological capabilities and strategic direction.

Spark’s Take on MSGM Stock

According to Spark, TipRanks’ AI Analyst, MSGM is a Neutral.

Motorsport Games is navigating significant financial challenges, including persistent losses and high leverage, which weigh heavily on its stock score. Despite these challenges, there are positive indicators, such as recent revenue growth, successful product launches, and favorable corporate developments. However, the mixed technical signals and challenging valuation context suggest the need for caution, balancing growth potential with financial risks.

To see Spark’s full report on MSGM stock, click here.

Delistings and Listing ChangesPrivate Placements and FinancingRegulatory Filings and Compliance

Motorsport Games Regains Nasdaq Compliance with Pimax Investment

Positive

Apr 17, 2025

Motorsport Games Inc. announced on April 17, 2025, that it has regained compliance with Nasdaq’s stockholders’ equity requirement, following a previous notice of non-compliance in November 2024. This achievement, coupled with a strategic investment from Pimax, is seen as a validation of the company’s progress and positions it to enhance shareholder value through recent product developments and cost-control measures.

Spark’s Take on MSGM Stock

According to Spark, TipRanks’ AI Analyst, MSGM is a Neutral.

Motorsport Games is currently facing significant financial challenges, including ongoing losses and high leverage, which are major risk factors. Technical analysis reflects bearish sentiment, further compounded by valuation concerns due to a negative P/E ratio. However, the earnings call reveals some potential for growth with increased revenues and new product successes, offering a glimmer of recovery potential. The overall score reflects these mixed signals, with financial difficulties weighing heavily against the positive outlook from recent developments.

To see Spark’s full report on MSGM stock, click here.

Delistings and Listing ChangesExecutive/Board ChangesPrivate Placements and Financing

Motorsport Games Secures $2.5M in Private Placement

Neutral

Apr 14, 2025

On April 11, 2025, Motorsport Games Inc. entered into a securities purchase agreement with several investors, resulting in a private placement of securities for gross proceeds of approximately $2.5 million. This move is expected to aid the company in meeting Nasdaq’s listing requirements, as it had previously received a deficiency letter for not complying with the minimum stockholders’ equity requirement. The company plans to use the net proceeds for working capital and strategic initiatives, while also appointing a new director, Guoquan (Paul) Huang, as part of the agreement.

Spark’s Take on MSGM Stock

According to Spark, TipRanks’ AI Analyst, MSGM is a Neutral.

To see Spark’s full report on MSGM stock, click here.

Product-Related AnnouncementsBusiness Operations and StrategyFinancial Disclosures

Motorsport Games Sees Revenue Growth in Q4 2024

Positive

Mar 20, 2025

Motorsport Games reported its financial results for the fourth quarter and full year 2024, highlighting a revitalizing year with improved revenues and reduced cash burn. The release of ‘Le Mans Ultimate’ in early access and subsequent updates significantly boosted player numbers and consumer sentiment. The company’s revenue for Q4 2024 increased by 13% compared to the previous year, reaching $2.0 million, while full-year revenue rose by 25.7% to $8.7 million. Despite a net loss for the year, the company saw a substantial improvement from the previous year, driven by increased sales and a new subscription service. These developments have opened new opportunities for partnerships and potential business investments.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.