Motorsport Games (MSGM) AI Stock Analysis

• Market Cap: $20.11M
• Dividend Yield: N/A
• Average Volume (3M): 40.45K
• Price to Earnings (P/E): 630.9
• Beta (1Y): -0.66
• Revenue Growth: -9.65%
• EPS Growth: N/A
• Country: US
• Employees: 22
• Sector: Communication Services
• Sector Strength: 81
• Industry: Electronic Gaming & Multimedia
• EPS (TTM): 0.33
• Shares Outstanding: 5,078,450
• 10 Day Avg. Volume: 56,392
• 30 Day Avg. Volume: 40,451
• PEG Ratio: -0.29
• Price to Book (P/B): 16.69
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -10.10
• Enterprise Value/Market Cap: 0.80
• Enterprise Value/Revenue: 0.49
• Enterprise Value/Gross Profit: 3.67
• Enterprise Value/Ebitda: 1.97
• 1Y Price Target: $3.00
• Price Target Upside: -13.54% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 0

• Rating: 56 Neutral
• Price Target: $3.50 ▲(0.86%Upside)

Motorsport Games Inc. has a challenging financial performance with persistent losses and high leverage, which significantly impacts its overall score. The technical analysis is relatively positive, indicating potential bullish momentum. However, the high P/E ratio suggests an overvaluation. Despite improvements in net income and a positive investment, the company's liquidity challenges and revenue decline remain concerns. Recent corporate events provide some optimism for future growth.

Motorsport Games Business Overview & Revenue Model

Company Description

Motorsport Games (MSGM) is a leading developer, publisher, and provider of immersive motorsport racing experiences. The company specializes in creating and publishing racing video games across various platforms, including consoles, PCs, and mobile devices. Motorsport Games is known for its official licenses with prominent racing series such as NASCAR, the British Touring Car Championship (BTCC), and the 24 Hours of Le Mans, delivering authentic and engaging gaming experiences to motorsport enthusiasts worldwide.

How the Company Makes Money

Motorsport 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 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
EBITDA	-337.88K	-11.43M	-33.20M	-31.42M	757.82K
Net Income	-2.75M	-13.05M	-47.42M	-34.99M	-2.51M
Balance Sheet
Total Assets	6.27M	9.76M	18.90M	50.70M	17.39M
Cash, Cash Equivalents and Short-Term Investments	859.27K	1.68M	979.31K	17.82M	3.99M
Total Debt	47.41K	198.67K	997.83K	119.02K	10.85M
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: 3.47
• 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 3.47 is above the 20-day moving average (MA) of 3.04, above the 50-day MA of 2.90, and above the 200-day MA of 1.74, indicating a bullish trend. The MACD of 0.17 indicates Negative momentum. The RSI at 68.89 is Neutral, neither overbought nor oversold. The STOCH value of 85.13 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 *	62 Neutral	$41.14B	-1.94	-12.06%	3.94%	2.09%	-69.68%
MSGM	56 Neutral	$20.11M	630.91	-31.58%	―	-9.65%	―
DLPN	52 Neutral	$13.63M	―	-98.74%	―	0.31%	27.47%
SLE	44 Neutral	$4.55M	―	-1222.32%	―	-43.42%	81.31%
VSME	31 Underperform	$54.40M	―	-157.27%	―	―	―
TC	30 Underperform	$2.41M	―	-425.84%	―	―	―

Motorsport Games Corporate Events

Motorsport Games Settles Insurance Dispute with Wesco

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.

The most recent analyst rating on (MSGM) stock is a Hold with a $5.00 price target. To see the full list of analyst forecasts on Motorsport Games stock, see the MSGM Stock Forecast page.

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.