Motorsport Games (MSGM) AI Stock Analysis

• Market Cap: $23.81M
• Dividend Yield: N/A
• Average Volume (3M): 465.11K
• Price to Earnings (P/E): 44.8
• Beta (1Y): -0.75
• Revenue Growth: 11.38%
• EPS Growth: -94.39%
• Country: US
• Employees: 22
• Sector: Communication Services
• Sector Strength: 97
• Industry: Electronic Gaming & Multimedia
• EPS (TTM): 0.14
• Shares Outstanding: 5,078,450
• 10 Day Avg. Volume: 86,980
• 30 Day Avg. Volume: 465,105
• PEG Ratio: 0.02
• Price to Book (P/B): 7.89
• Price to Sales (P/S): 0.45
• P/FCF Ratio: -1.37
• Enterprise Value/Market Cap: 0.71
• Enterprise Value/Revenue: 1.78
• Enterprise Value/Gross Profit: 2.46
• Enterprise Value/Ebitda: 3.19
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 65 Neutral
• Price Target: $5.00 ▲(76.68% Upside)

The score is driven primarily by the earnings and operational turnaround (profits improving and going-concern disclosure removed) and a currently stronger balance sheet. It is held back by weak cash-flow conversion (negative free cash flow), a high P/E valuation, and overbought technical conditions that raise near-term volatility risk.

Positive Factors

Niche, licensed motorsport focus

A focused business model around officially licensed motorsport titles and related digital services creates a defensible niche. Licensing relationships and community-driven content (DLC, RaceControl) support recurring revenue and brand loyalty, improving long-term monetization versus one-off releases.

High digital-era margins

Sizable gross and operating margins reflect a low marginal cost distribution model for digital game sales and DLC, which supports durable profitability as content scales. If revenue growth continues, high incremental margins can translate to sustained cash earnings and reinvestment capacity.

Conservative balance sheet profile

A very low debt load and improving equity position reduce financial risk and provide flexibility to fund development or secure partnerships for console expansion. This balance sheet conservatism supports resilience through game cycle volatility and lowers refinancing pressure over the medium term.

Negative Factors

Weak cash conversion and negative free cash flow

Earnings have turned positive, but thin operating cash compared with income and persistent negative free cash flow imply cash generation hasn't stabilized. This limits organic funding for development, marketing, and console launches without external financing or partner funding, a durable operational risk.

Revenue concentration and volatility

Recent revenue gains are concentrated in one title (Le Mans Ultimate) while the loss of NASCAR authorization removed a material stream. Reliance on a small portfolio raises execution risk: underperformance or licensing changes can produce sharp revenue swings over multiple quarters.

Small scale and resource constraints

A very small headcount constrains in-house development, live-ops, QA and global marketing execution for multi-platform launches. Scaling to consoles and sustaining live services typically require larger teams or costly partnerships, making growth execution dependent on external capital or alliances.

Motorsport Games Business Overview & Revenue Model

Company Description

Motorsport Games Inc. develops and publishes multi-platform racing video games in the United States. It operates through Gaming and Esports segments. The company offers video games for game consoles, personal computer, and mobile platforms through various retail and digital channels, including full-game and downloadable content. It also organizes and facilitates esports tournaments, competitions, and events for its licensed racing games, as well as on behalf of third-party racing game developers and publishers. The company sells its video game products through various retail and digital channels. Motorsport Games Inc. was founded in 2018 and is headquartered in Miami, Florida. Motorsport Games Inc. operates as a subsidiary of Motorsport Network LLC.

How the Company Makes Money

Motorsport Games generates revenue through multiple streams, primarily from the sale of video games across various platforms, including digital downloads and physical copies. The company benefits from licensing agreements with major motorsport organizations, allowing it to produce games featuring authentic branding and vehicles, which enhances their appeal and marketability. Additionally, MSGM earns money through in-game purchases, downloadable content (DLC), and expansion packs that provide players with new features, vehicles, and tracks. The company also pursues revenue through eSports events and sponsorships, capitalizing on the growing popularity of competitive gaming in the motorsport sector. Strategic partnerships with automotive brands and sponsorship deals further contribute to its earnings, as well as potential revenue from advertising and merchandising related to their gaming franchises.

Motorsport Games Financial Statement Overview

Summary

Income statement shows a strong TTM profitability inflection (high gross margin and positive EBIT/net margins), and the balance sheet is currently low-debt with improved equity. Offsetting this, cash-flow quality is weak (negative free cash flow and thin operating cash flow versus earnings) and results have been historically volatile, reducing confidence in durability.

Income Statement

TTM (Trailing-Twelve-Months) results show a sharp profitability inflection: revenue grew 15.96% with strong gross margin (~72.5%) and solid operating profitability (EBIT margin ~25.8%), producing a positive net margin (~23.7%). This is a meaningful turnaround versus 2024 (annual) and 2023 (annual), which posted sizable operating and net losses with negative margins. The key strength is the clear swing to positive earnings on rising revenue; the main weakness is the high volatility and limited consistency across prior years, which raises confidence risk in the durability of the improvement.

Balance Sheet

Leverage appears very low in TTM (Trailing-Twelve-Months), with total debt minimal relative to equity (debt-to-equity ~0.00), and equity rising materially versus 2024 (annual). Balance sheet risk also looks improved from earlier years where leverage and equity quality were more strained (notably 2020 with negative equity and 2022 with higher debt-to-equity). The primary strength is the currently conservative debt profile and improved equity base; the key weakness is the historical instability in equity and returns, suggesting the balance sheet has been uneven through the cycle.

Cash Flow

Cash generation is the weakest area: TTM (Trailing-Twelve-Months) operating cash flow is positive but small relative to earnings, and free cash flow is negative, indicating profitability is not yet translating into sustained cash build. This is an improvement versus 2021–2024 (annual), which showed deeply negative operating and free cash flow, but the latest period still signals reinvestment needs and/or working-capital drag. Strength: large improvement from prior heavy cash burn; weakness: negative free cash flow and thin operating cash flow relative to income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	9.42M	8.69M	6.91M	10.32M	15.08M	19.05M
Gross Profit	6.84M	5.46M	3.29M	5.36M	7.55M	12.45M
EBITDA	5.27M	-337.88K	-11.43M	-33.63M	-31.42M	757.82K
Net Income	2.23M	-2.75M	-14.32M	-35.99M	-33.16M	-1.76M
Balance Sheet
Total Assets	10.10M	6.27M	9.76M	18.90M	50.70M	17.39M
Cash, Cash Equivalents and Short-Term Investments	4.13M	859.27K	1.68M	979.31K	17.82M	3.99M
Total Debt	26.12K	47.41K	198.67K	997.83K	119.02K	10.85M
Total Liabilities	3.31M	5.04M	7.67M	16.99M	12.72M	15.77M
Stockholders Equity	5.85M	496.26K	1.04M	1.53M	36.72M	-1.03M
Cash Flow
Free Cash Flow	-115.32K	-2.86M	-13.71M	-19.81M	-21.70M	3.92M
Operating Cash Flow	191.44K	-2.84M	-12.92M	-19.52M	-20.94M	4.05M
Investing Cash Flow	529.74K	1.18M	4.21M	-292.45K	-14.39M	-1.80M
Financing Cash Flow	1.50M	834.05K	9.94M	1.71M	49.26M	-225.85K

Motorsport Games Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2.83
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• 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 2.83 is below the 20-day moving average (MA) of 3.56, below the 50-day MA of 3.13, and below the 200-day MA of 2.91, indicating a bullish trend. The MACD of 0.34 indicates Negative momentum. The RSI at 64.99 is Neutral, neither overbought nor oversold. The STOCH value of 81.03 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
MSGM	65 Neutral	$23.81M	44.78	44.93%	―	11.38%	-94.39%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
GIGM	50 Neutral	$16.91M	-13.35	-3.14%	―	10.15%	67.65%
MYPS	46 Neutral	$80.01M	-2.12	-14.82%	―	-17.17%	-51.88%
SKLZ	45 Neutral	$55.90M	-0.76	-48.34%	―	-8.99%	-117.83%

Motorsport Games Corporate Events

Motorsport Games Reports Strong Q3 2025 Financial Results

Motorsport Games reported its financial results for the third quarter of 2025, showing a significant improvement in revenue and profitability compared to the previous year. The company’s revenue increased by 71.9% to $3.1 million, and it achieved a net income of $0.8 million, driven by the success of its Le Mans Ultimate title and the release of new content. The company also announced plans for a console port of Le Mans Ultimate, expected between late 2026 and early 2027, indicating a strategic expansion into the console gaming market.

The most recent analyst rating on (MSGM) stock is a Hold with a $2.50 price target. To see the full list of analyst forecasts on Motorsport Games stock, see the MSGM Stock Forecast page.