Motorsport Games Inc.

MSGM

$4.02

-1.47%

N/A-$0.06

Technology

Electronic Gaming & Multimedia

NASDAQ

Active Trading

Motorsport Games Inc. is an American enterprise primarily focused on the creation and distribution of multi-platform racing video games. The company's operations ...

Fundamental Analysis of MSGM

Key Strengths

Exclusive licenses for prestigious motorsport events (24 Hours of Le Mans, FIA WEC).

Impressive financial turnaround with strong net margin (45.7%) and EBITDA margin (22.4%).

Risk Factors

Heavy reliance on a limited number of licensed racing franchises, leading to revenue concentration.

Small company with a market cap under $25 million, vulnerable to liquidity and volatility issues.

Profitability

Net Margin16.16%

Operating Margin10.25%

Valuation

P/E Ratio9.35x

Current Ratio1.85

Efficiency

ROE39.82%

ROA20.72%

Fundamental Analysis of MSGM

Motorsport Games Inc. is a niche player in the racing video game and esports market, holding official licenses for iconic motorsport series like the 24 Hours of Le Mans and the FIA World Endurance Championship. The company has shown remarkable financial improvement in recent quarters: Q3 2025 revenues surged 71.9% year-over-year to $3.1 million, and the firm has achieved positive net income, driven by cost rationalization and strategic focus on high-margin digital and esports offerings. The trailing twelve-month (TTM) financials reveal a dramatic turnaround: net margin at 45.7%, operating margin at 20.8%, and EBITDA margin at 22.4%, with a return on equity of 101.3% and return on assets of 44.7%. The balance sheet is solid with a current ratio of 2.32, quick ratio of 2.32, and minimal debt (debt-to-equity of 5.1%), ensuring ample liquidity (cash ratio of 1.5). Revenue per share is $2.49, and free cash flow per share is $0.85, highlighting efficient capital allocation. However, these exceptional margins may be unsustainable due to the company's small size and dependence on a limited number of titles. The market cap is just over $23 million, with a P/E ratio of 3.71 and price-to-sales of 1.73, indicating undervaluation if the growth trajectory continues. The stock carries high beta (1.75), reflecting volatility. Risks include reliance on licensed IP, cyclical consumer spending, and potential dilution. Overall, the company appears to be executing well, but investors should monitor sustainability and industry competition.

Key Strengths of MSGM

Exclusive licenses for prestigious motorsport events (24 Hours of Le Mans, FIA WEC).
Impressive financial turnaround with strong net margin (45.7%) and EBITDA margin (22.4%).
Healthy balance sheet: current ratio 2.32, low debt, positive working capital.
High revenue growth in recent quarters (Q3 2025 up 71.9% YoY).
Strong free cash flow generation (FCF yield 19.8%).
Niche focus on racing games and esports, allowing specialization.
Growing esports presence with Le Mans Virtual Series.

Risk Factors of MSGM

Heavy reliance on a limited number of licensed racing franchises, leading to revenue concentration.
Small company with a market cap under $25 million, vulnerable to liquidity and volatility issues.
High beta (1.748) exposes stock to market swings.
Potential for legal disputes and shareholder litigation (ongoing).
Industry competition from major publishers (e.g., EA, Ubisoft).
Consumer spending on discretionary video games may decline during economic downturns.
Dependence on external licensors; renewal of licenses is not guaranteed.

Market Cap vs Revenue & Earnings

Earnings

n/a

Revenue

n/a

Market cap

$21.74M

9.3x

P/E Ratio

1.5x

P/S Ratio

Earnings & Revenue

Last Reportedn/a

Earnings per share (EPS)n/a

Gross Margin83.55%

Net Profit Margin16.16%

Debt/Equity Ratio0.37

Profitability Bridge (Current vs YoY)

How gross, operating and net margins shifted versus last year.

Revenue / Net Income / FCF History (USD B)

Growth Signals of MSGM

Metric	Current	Previous	YoYYear-over-Year change: current quarter versus the same quarter last year.	QoQQuarter-over-Quarter change: current quarter versus the immediately previous quarter.	Signal
Revenue	—	—	—	—	Flat
Diluted EPS	—	—	—	—	Flat
Free Cash Flow	—	—	—	—	Flat

Profitability of MSGM

Metric	Current	Previous	YoYYear-over-Year change: current quarter versus the same quarter last year.	QoQQuarter-over-Quarter change: current quarter versus the immediately previous quarter.	Signal
Net Margin	—	11.34%	—	—	Flat
Operating Margin	—	18.03%	—	—	Flat
ROE	—	—	—	—	Flat

Financial Health of MSGM

Metric	Current	Previous	YoYYear-over-Year change: current quarter versus the same quarter last year.	QoQQuarter-over-Quarter change: current quarter versus the immediately previous quarter.	Signal
Current Ratio	—	1.851	—	—	Flat
Quick Ratio	—	1.851	—	—	Flat
Debt / Equity	—	0.369	—	—	Flat

Valuation of MSGM

Metric	Current	Previous	YoYYear-over-Year change: current quarter versus the same quarter last year.	QoQQuarter-over-Quarter change: current quarter versus the immediately previous quarter.	Signal
P/E	—	12.50x	—	—	Flat
P/B	—	5.26x	—	—	Flat

Supply Chain of MSGM

RELATIONS

Upstream

Studio 397Epic GamesValve CorporationSony Group CorporationNYSE:SONY Microsoft CorporationNASDAQ:MSFTPimax Technology704Games (Orlando Studio)NVIDIA CorporationNASDAQ:NVDA

Downstream

Valve Corporation (Steam)Sony Interactive Entertainment (PlayStation Store)NYSE:SONY Microsoft (Xbox Store)NASDAQ:MSFTEpic Games StoreKindred Concepts (F1 Arcade)Automobile Club de l'Ouest (ACO)Formula E Operations (FIA Formula E Championship)Coach Dave Academy (CDA)British Touring Car Championship (BTCC / TOCA)GameStop Corp.NYSE:GME

Proxies

iRacing.com Motorsport SimulationsUnconfirmedElectronic Arts Inc.NASDAQ:EA Take-Two Interactive Software Inc.NASDAQ:TTWO Unity Software Inc.NYSE:U

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Plutux is not an investment adviser. Market data and AI-generated analysis are for information and education only, not investment advice. Disclaimer