Motorsport Games (MSGM) AI Stock Analysis

• Market Cap: $16.70M
• Dividend Yield: N/A
• Average Volume (3M): 1.56M
• Price to Earnings (P/E): 527.3
• Beta (1Y): -0.64
• Revenue Growth: -9.65%
• EPS Growth: N/A
• Country: US
• Employees: 22
• Sector: Communication Services
• Sector Strength: 83
• Industry: Electronic Gaming & Multimedia
• EPS (TTM): 0.33
• Shares Outstanding: 5,078,450
• 10 Day Avg. Volume: 67,945
• 30 Day Avg. Volume: 1,564,197
• PEG Ratio: 0.02
• Price to Book (P/B): 16.15
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -4.42
• Enterprise Value/Market Cap: 0.71
• Enterprise Value/Revenue: 0.35
• Enterprise Value/Gross Profit: 2.20
• Enterprise Value/Ebitda: -11.93
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0

• Rating: 49 Neutral
• Price Target: ―

Motorsport Games' overall score reflects significant financial difficulties with persistent losses and high leverage weighing heavily. Despite a mixed technical outlook and concerning valuation, recent improvements in net income and favorable investments provide some optimism. However, the company's fundamental financial challenges remain a substantial risk, necessitating caution for potential investors.

Motorsport Games Business Overview & Revenue Model

Company Description

Motorsport 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 Money

Motorsport 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

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

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

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.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
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 Price: 2.90
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

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 2.9 is above the 20-day moving average (MA) of 2.55, above the 50-day MA of 1.76, and above the 200-day MA of 1.41, indicating a bullish trend. The MACD of 0.29 indicates Negative momentum. The RSI at 71.02 is Negative, neither overbought nor oversold. The STOCH value of 90.67 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MSGM.

Motorsport Games Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	60 Neutral	$14.09B	6.90	-3.35%	3.68%	2.44%	-36.27%
MSGM	49 Neutral	$16.70M	527.27	-31.58%	―	-9.65%	―
DLPN	46 Neutral	$12.30M	―	-98.74%	―	0.31%	27.47%
VSME	31 Underperform	$7.54M	―	-157.27%	―	―	―
TC	30 Underperform	$2.38M	―	-425.84%	―	―	―
SLE	23 Underperform	$4.04M	―	-1222.32%	―	-43.42%	81.31%

Motorsport Games Corporate Events

Motorsport Games Reports Q1 2025 Financial Results

On May 9, 2025, Motorsport Games Inc. reported its financial results for the first quarter of 2025, ending March 31. The company achieved a net income of $1.0 million, a significant improvement from a net loss of $1.7 million in the same period the previous year. This positive shift is attributed to increased revenue from the Le Mans Ultimate game and a $2.5 million private placement led by Pimax. Despite a decrease in revenue and gross profit compared to the previous year, the company is optimistic about future growth opportunities, particularly with planned updates for its Le Mans Ultimate game.

Motorsport Games Appoints New Board Director

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.

Motorsport Games Regains Nasdaq Compliance with Pimax Investment

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.

Motorsport Games Secures $2.5M in Private Placement

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.

Motorsport Games Sees Revenue Growth in Q4 2024

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.