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Motorsport Games (MSGM)
NASDAQ:MSGM
US Market
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Motorsport Games (MSGM) AI Stock Analysis

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MSGM

Motorsport Games

(NASDAQ:MSGM)

Rating:49Neutral
Price Target:
$3.00
▲(2.04% Upside)
Motorsport Games' overall stock score is primarily influenced by its financial performance challenges, including persistent losses and high leverage. However, the recent positive developments highlighted in the earnings call, such as record revenues and the first positive income from operations, provide a significant boost. The technical analysis and valuation scores reflect ongoing market and profitability challenges, respectively.

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

Motorsport Games Business Overview & Revenue Model

Company DescriptionMotorsport 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 MoneyMotorsport Games generates revenue primarily through the sale of its video games, which are distributed digitally and physically across major gaming platforms. The company also earns money through downloadable content (DLC) and expansion packs that enhance the gaming experience for users, providing additional features, vehicles, and tracks. Motorsport Games benefits from strategic partnerships and licensing agreements with major racing organizations, allowing them to create officially branded games that attract a dedicated fan base. Additionally, the company leverages esports by organizing competitive gaming tournaments and events, which can generate income through sponsorships, advertising, and broadcasting rights. These diverse revenue streams are integral to Motorsport Games' financial performance and growth strategy.

Motorsport Games Earnings Call Summary

Earnings Call Date:Aug 13, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Nov 14, 2025
Earnings Call Sentiment Positive
The earnings call reflects a positive turnaround for Motorsport Games, highlighted by record revenues from Le Mans Ultimate, substantial growth in subscription services, and the first-ever positive income from operations. Despite the loss of NASCAR revenues and limited cash reserves, the company has shown significant improvements in its financial and operational metrics.
Q2-2025 Updates
Positive Updates
Record Game Revenues for Le Mans Ultimate
The month of June delivered record game revenues, with new concurrent and daily active user records set, demonstrating strong continued interest in the product.
Significant Revenue and Net Income Growth
Revenues for the quarter were $2.6 million, up 37.7% from the prior year, and net income increased by 103%, despite the discontinuation of NASCAR revenues.
Successful Launch of Subscription Service
RaceControl, the subscription service, showed net monthly recurring revenue growth of 296% in June, with a quick ratio of 4.66, indicating significant growth.
First Positive Income from Operations
Q2 2025 marked the first quarter in the company's history to generate income from operations, totaling $2 million.
Expansion of Le Mans Ultimate
Announced expansion to include European Le Mans series, adding new venues and cars, which excited fans and contributed to product visibility.
Strong SaaS Component Growth
The subscription service contributed significantly to the business, with an annual recurring revenue of approximately $972,000 and monthly recurring revenue of $81,000.
Negative Updates
Loss of NASCAR Revenues
There was a $0.9 million decrease in NASCAR-related revenues as the company is no longer authorized to sell NASCAR titles starting in 2025.
Limited Cash Reserves
As of June 30, 2025, cash and cash equivalents were $2.4 million, with a modest increase to $2.8 million by July 31, 2025.
Company Guidance
During the second quarter of 2025 earnings call for Motorsport Games, key metrics were highlighted showcasing the company's significant progress. Revenues increased by 37.7% to $2.6 million, driven by sales of the Le Mans Ultimate Racing title and its DLCs, alongside a boost from their Race Control platform. Net income saw an impressive 103% rise to $4.2 million, marking the first quarter in the company's history with positive income from operations, aided by settlements totaling $1.3 million. The adjusted EBITDA improved significantly to $3.7 million from a loss of $0.5 million in the prior year. The company also reported a substantial increase in player engagement, with over 6,000 drivers registering for Le Mans Virtual, and a quick ratio of 4.66, indicating strong subscription growth. Cash and cash equivalents grew to $2.8 million by the end of July 2025. These metrics underscore the effectiveness of Motorsport Games' strategic focus on their Le Mans Ultimate title and the successful integration of SaaS offerings through the Race Control platform.

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
45
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
35
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
40
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue8.13M8.69M6.91M10.32M15.08M19.05M
Gross Profit5.42M5.46M3.29M5.36M7.55M12.45M
EBITDA3.02M-337.88K-11.43M-33.20M-31.42M757.82K
Net Income1.45M-2.75M-13.05M-35.99M-33.16M-1.76M
Balance Sheet
Total Assets8.15M6.27M9.76M18.90M50.70M17.39M
Cash, Cash Equivalents and Short-Term Investments2.37M859.27K1.68M979.31K17.82M3.99M
Total Debt31.22K47.41K198.67K997.83K119.02K10.85M
Total Liabilities2.58M5.04M7.67M16.99M12.72M15.77M
Stockholders Equity4.82M496.26K3.04M1.53M36.72M-1.03M
Cash Flow
Free Cash Flow-1.19M-2.86M-13.71M-19.81M-21.92M3.82M
Operating Cash Flow-1.19M-2.84M-12.92M-19.52M-20.94M4.05M
Investing Cash Flow836.63K1.18M4.21M-292.45K-14.39M-480.96K
Financing Cash Flow2.54M834.05K9.94M1.71M49.26M-1.54M

Motorsport Games Technical Analysis

Technical Analysis Sentiment
Positive
Last Price2.94
Price Trends
50DMA
3.15
Negative
100DMA
2.86
Positive
200DMA
2.05
Positive
Market Momentum
MACD
-0.08
Positive
RSI
45.26
Neutral
STOCH
33.89
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 2.94 is below the 20-day moving average (MA) of 3.03, below the 50-day MA of 3.15, and above the 200-day MA of 2.05, indicating a neutral trend. The MACD of -0.08 indicates Positive momentum. The RSI at 45.26 is Neutral, neither overbought nor oversold. The STOCH value of 33.89 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 (60)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
60
Neutral
$46.28B4.13-13.12%4.13%1.85%-42.71%
54
Neutral
$17.14M-1.51%-4.03%84.99%
53
Neutral
$132.00M-40.15%-18.41%-61.67%
52
Neutral
$120.54M-12.32%-13.95%-75.02%
49
Neutral
$16.99M630.9131.90%-2.69%-114.02%
$112.92M3.07-22.85%
$64.16M-121.97%
* Communication Services Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
MSGM
Motorsport Games
2.94
1.63
124.43%
GIGM
Gigamedia
1.55
0.24
18.32%
NCTY
The9
9.06
2.15
31.11%
GDC
GD Culture Group
3.89
-1.73
-30.78%
SKLZ
Skillz
7.40
1.84
33.09%
MYPS
PLAYSTUDIOS
0.96
-0.49
-33.79%

Motorsport Games Corporate Events

Product-Related AnnouncementsBusiness Operations and StrategyFinancial Disclosures
Motorsport Games Reports Strong Q2 2025 Financial Growth
Positive
Aug 13, 2025

Motorsport Games reported a significant financial growth in Q2 2025, with net income reaching $4.3 million, a 102.2% increase from the previous year. The release of Le Mans Ultimate Version 1.0 and strategic marketing efforts contributed to record player activity and increased revenues, positioning the company for future expansion with new downloadable content and potential new titles.

Legal Proceedings
Motorsport Games Settles Insurance Dispute with Wesco
Neutral
Jun 6, 2025

Motorsport Games Inc. is involved in a legal settlement with Wesco Insurance Company regarding a coverage dispute related to a previous complaint filed by former minority stockholders of 704Games. The settlement, effective June 2, 2025, requires Wesco to pay $800,000 to Driven Lifestyle, the company’s majority shareholder, and dismiss the coverage action with prejudice, resolving the insurance coverage issues.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Sep 03, 2025