Motorsport Games (MSGM) AI Stock Analysis

• Market Cap: $25.95M
• Dividend Yield: N/A
• Average Volume (3M): 465.11K
• Price to Earnings (P/E): 2.2
• Beta (1Y): -0.66
• Revenue Growth: 11.38%
• EPS Growth: -94.39%
• Country: US
• Employees: 22
• Sector: Communication Services
• Sector Strength: 97
• Industry: Electronic Gaming & Multimedia
• EPS (TTM): 0.15
• Shares Outstanding: 5,078,450
• 10 Day Avg. Volume: 86,980
• 30 Day Avg. Volume: 465,105
• PEG Ratio: >-0.01
• Price to Book (P/B): 2.26
• Price to Sales (P/S): 1.36
• P/FCF Ratio: 3.78
• Enterprise Value/Market Cap: 0.69
• Enterprise Value/Revenue: 1.58
• Enterprise Value/Gross Profit: 1.95
• Enterprise Value/Ebitda: 6.45
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): -0.92
• Revenue Forecast (FY): $18.80M

• Rating: 72 Outperform
• Price Target: $5.00 ▲(76.68% Upside)
• Action: Reiterated Date: 03/17/26
• Date: Action: Reiterated 03/17/26

The score is driven primarily by the 2025 financial turnaround (profitability, positive free cash flow, and low leverage) and supportive technical trend/momentum. Valuation is a positive tailwind due to the very low P/E, while the overall rating is tempered by the historical volatility of results and the identified NASCAR revenue loss.

Positive Factors

Profitability Turnaround

A sustained move to high gross and net margins across 2025 indicates the company has a structurally profitable cost and monetization model for its core titles. Consecutive profitable quarters improve internal funding capacity for development and reduce dependence on external financing over the next several quarters.

Low Leverage & Strong Balance Sheet

Minimal debt and materially improved equity provide financial flexibility to fund console development and content investment without large interest burdens. A healthier balance sheet reduces bankruptcy risk and supports multi-quarter investments in product expansion and marketing when needed.

Le Mans Ultimate Product Momentum

Rapid user growth and higher engagement on Le Mans Ultimate signal a durable platform for DLC and in-game monetization. A growing, engaged player base supports recurring content revenue, improves unit economics per title, and underpins longer-term margin sustainability if player retention and DLC conversion persist.

Negative Factors

Historic Profit/Cash Volatility

The sharp one-year turnaround follows years of losses and cash burn, highlighting earnings and cash-flow volatility. Such swings imply execution and revenue risks remain; investors need multiple quarters of consistent free cash flow to consider the margin profile and profitability durable across cycles.

Loss of NASCAR Revenue

Losing authorization for a licensed title is a structural revenue reduction and shows dependency on third-party licenses. This reduces product diversification and increases concentration risk on fewer franchises; unless replaced, it impairs long-term revenue stability and bargaining leverage with rights holders.

Small Scale and Concentration Risk

A modest revenue base constrains R&D, marketing reach, and ability to absorb underperforming titles. With a small team and concentrated revenue by title, setbacks or lower DLC conversion can materially affect margins and cash flow, making multi-quarter scaling and diversification essential for durable fundamentals.

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 primarily generates revenue from (1) sales of its racing video games (digital downloads and, where applicable, physical retail units) and (2) post-launch monetization tied to those games, such as downloadable content (DLC) and other add-on content sold through platform storefronts. The company may also earn revenue through commercial arrangements connected to its licensed motorsport properties (e.g., licensed-game publishing rights and related collaborations); however, specific partnership terms, the materiality of individual licenses, and the exact mix of revenue by stream are null. Other potential contributors—such as in-game microtransactions, live-service subscriptions, esports/event-related revenue, or advertising/sponsorship—are not confirmed here and are therefore null.

Motorsport Games Financial Statement Overview

Summary

Financials show a sharp 2025 turnaround: strong profitability (high gross and net margins), positive operating and free cash flow, and minimal debt. The key risk is durability given the large swing from multi-year losses and cash burn (2021–2024) to strong 2025 results.

Income Statement

Profitability rebounded sharply in 2025 with strong gross margin (about 81%) and a high net margin (about 61%) on roughly $11.3M of revenue, following multiple years of heavy losses and negative margins (2021–2024). Revenue also accelerated in 2025 (up ~19.9% YoY) after weaker/declining trends earlier. Key weakness is volatility: the company moved from deeply negative earnings in 2022–2023 to strong profitability in 2025, which raises sustainability risk despite the improved trajectory.

Balance Sheet

Leverage is very low in 2025 (debt-to-equity near 0.00 with only ~$17.6K of debt), and equity improved materially versus 2024, supporting better financial flexibility. Total assets also increased to about $12.0M in 2025. The main concern is historical instability in capital structure and returns (including negative equity in 2020 and very weak/negative returns on equity in 2021–2024), suggesting the balance sheet quality has improved recently but has not been consistently stable across cycles.

Cash Flow

Cash generation improved meaningfully in 2025 with positive operating cash flow (~$4.1M) and positive free cash flow (~$4.1M), a major reversal from 2021–2024 when both were strongly negative. Free cash flow also largely tracked reported profits in 2025 (free cash flow is ~1.0x net income), which is a quality positive. The weakness is consistency: free cash flow growth is extremely volatile (including very large swings) and prior years show sustained cash burn, so the recent improvement needs to prove durable.

Breakdown	Dec 2025	Dec 2024	Mar 2024	Dec 2022	Dec 2021
Income Statement
Total Revenue	11.30M	8.69M	6.91M	10.32M	15.08M
Gross Profit	9.16M	5.46M	3.29M	5.36M	7.55M
EBITDA	2.76M	-337.88K	-11.43M	-33.63M	-31.42M
Net Income	6.93M	-2.75M	-14.32M	-35.99M	-33.16M
Balance Sheet
Total Assets	11.97M	6.27M	9.76M	18.90M	50.70M
Cash, Cash Equivalents and Short-Term Investments	4.99M	859.27K	1.68M	979.31K	17.82M
Total Debt	17.57K	47.41K	198.67K	997.83K	119.02K
Total Liabilities	4.39M	5.04M	7.67M	16.99M	12.72M
Stockholders Equity	6.78M	496.26K	1.04M	1.53M	36.72M
Cash Flow
Free Cash Flow	4.06M	-2.86M	-13.71M	-19.81M	-21.70M
Operating Cash Flow	4.07M	-2.84M	-12.92M	-19.52M	-20.94M
Investing Cash Flow	-1.12M	1.18M	4.21M	-292.45K	-14.39M
Financing Cash Flow	1.06M	834.05K	9.94M	1.71M	49.26M

Motorsport Games Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2.83
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: 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 2.83 is below the 20-day moving average (MA) of 3.94, below the 50-day MA of 3.72, and below the 200-day MA of 3.11, indicating a bullish trend. The MACD of 0.22 indicates Negative momentum. The RSI at 58.84 is Neutral, neither overbought nor oversold. The STOCH value of 60.96 is Neutral, 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	72 Outperform	$25.95M	2.21	44.93%	―	11.38%	-94.39%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
GIGM	50 Neutral	$16.69M	-4.67	-3.14%	―	10.15%	67.65%
MYPS	49 Neutral	$65.57M	-2.86	-15.36%	―	-17.17%	-51.88%
SKLZ	45 Neutral	$49.55M	-1.76	-45.42%	―	-8.99%	-117.83%

Motorsport Games Corporate Events

Motorsport Games Reports Profitable 2025 and Growth Momentum

Motorsport Games reported that 2025 marked a turnaround year, with the March 10, 2026 release showing the company swung from a net loss of $3.0 million in 2024 to net income of $6.8 million, or $1.43 per share, on full-year revenue of $11.3 million, driven primarily by strong sales and DLC performance from its Le Mans Ultimate title and higher margins. Fourth-quarter 2025 revenue nearly doubled to $3.8 million, gross margin expanded to 85.0%, Adjusted EBITDA improved sharply to $7.3 million for the year, and management highlighted sustained positive operating income, a Version 1.2 upgrade that boosted player engagement, and a new $3 million Citibank revolving credit line as reinforcing the company’s financial resilience and positioning for the next stage of growth.

The company also disclosed that average concurrent players on Steam for Le Mans Ultimate grew more than fivefold during 2025, peaking at 8,740 in January 2026, underscoring the title’s strengthening market traction. Strategic moves such as selling the NASCAR license to concentrate resources on core platforms and not staging Le Mans Virtual Series events in 2025 contributed to a leaner cost base and higher profitability, supporting management’s view that the turnaround phase is complete and that operations are now focused on scaling the existing platform and expanding the product portfolio.

The most recent analyst rating on (MSGM) stock is a Buy 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 Secures $3 Million Revolving Credit Facility

On February 20, 2026, Motorsport Games Inc. entered into a business loan agreement with Citibank, securing a revolving line of credit of up to $3 million at a floating interest rate tied to Adjusted Term SOFR plus 2.250%, with a maturity date of February 20, 2027. The facility is evidenced by a promissory note and is secured by a lien on substantially all of the company’s assets.

The credit agreement imposes financial covenants, including maintaining a fixed charge coverage ratio above 1.2 to 1.0 and a cash flow leverage ratio not exceeding 2.5 to 1.0, while restricting additional liens on company assets. Default triggers, such as covenant breaches, cross-defaults, or significant ownership changes of 25% or more, could lead to a 3 percentage point interest rate increase and immediate acceleration of all amounts due, underscoring tighter financial discipline and elevated risk for shareholders and creditors if performance deteriorates.

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