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Motorsport Games
(NASDAQ:MSGM)
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Rating:65Neutral
Price Target:
$4.00
▼(-8.47% Downside)
Action:Reiterated
Date:08/18/26
The score is driven primarily by improving financial performance—especially strong cash generation and very high gross margins—supported by a constructive earnings call showing rapid recurring-revenue scaling. These positives are tempered by mixed operating profitability signals and historical volatility, while technical indicators point to weaker near-term price momentum. Valuation is a modest positive given the low P/E.
Positive Factors
Strong revenue growth and gross margins
Rapid sales growth alongside expanding gross margins indicates stronger product traction and attractive unit economics. If sustained, this combination can improve operating leverage and provide more resources for continued content and platform investment.
Negative Factors
Operating profitability remains inconsistent
Negative operating margins indicate that reported net profitability has not yet translated into consistently profitable core operations. This raises earnings-quality concerns and leaves results vulnerable to development spending, launch timing, and revenue mix changes.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong revenue growth and gross margins
Rapid sales growth alongside expanding gross margins indicates stronger product traction and attractive unit economics. If sustained, this combination can improve operating leverage and provide more resources for continued content and platform investment.
Read all positive factors
Motorsport Games (MSGM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$18.40M
Dividend YieldN/A
Average Volume (3M)465.11K
Price to Earnings (P/E)9.1
Beta (1Y)-0.32
Revenue Growth78.65%
EPS GrowthN/A
CountryUS
Employees26
SectorCommunication Services
Sector Strength97
IndustryElectronic Gaming & Multimedia
Share Statistics
EPS (TTM)0.43
Shares Outstanding4,588,802
10 Day Avg. Volume86,980
30 Day Avg. Volume465,105
Financial Highlights & Ratios
PEG Ratio>-0.01
Price to Book (P/B)2.26
Price to Sales (P/S)1.36
P/FCF Ratio3.78
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda>-0.01
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)0.23
Revenue Forecast (FY)$14.11M
Motorsport Games Business Overview & Revenue Model
Company Description
Motorsport Games Inc. is an American enterprise primarily focused on the creation and distribution of multi-platform racing video games. The company's operations are divided into two distinct divisions: Gaming and Esports. It delivers its video ga...
How the Company Makes Money
MSGM’s revenue model is primarily driven by sales of its racing video games and related digital content. Key revenue streams typically include: (1) full game sales (digital downloads and, where applicable, physical retail units) for titles it publ...
Motorsport Games Earnings Call Summary
Earnings Call Date:Aug 14, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 13, 2026
Earnings Call Sentiment Positive
The call highlights strong and accelerating underlying business trends: substantial revenue growth (+74% YoY H1), steep expansion of gross margins (~84.7%), rapid scaling of RaceControl recurring revenue (+349% YoY) and organic subscriber growth (+230% YoY). The company has sustained profitability for six consecutive quarters and is executing on content and platform roadmaps including U.S. track content and console ports. Headwinds are largely related to comparability with prior year nonrecurring gains (which compress some quarterly metrics), a Q2 adjusted EBITDA decline versus an exceptionally good prior quarter, a reduced cash balance after a $3.7 million share repurchase, and the inherent execution risks of scaling a nascent SaaS platform and porting to consoles. Overall, the positive operational and recurring‑revenue momentum materially outweighs the concerns highlighted.Positive Updates
Strong Revenue Growth
First half revenue was $7.6 million, up 74% year‑over‑year, showing material top‑line expansion driven by live service momentum.
Negative Updates
Quarterly Adjusted EBITDA Decline
Adjusted EBITDA for Q2 2026 was $0.8 million compared to $1.4 million in Q2 2025 (Q2 2025 benefited from nonrecurring vendor invoice discounts), reflecting quarter‑to‑quarter softness versus last year.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong Revenue Growth
First half revenue was $7.6 million, up 74% year‑over‑year, showing material top‑line expansion driven by live service momentum.
Read all positive updates
Company Guidance
Management explicitly declined to give formal forward guidance but provided directional commentary and many operating metrics: RaceControl subscription revenue was ~ $1.4M in H1 2026 (up ~349% YoY), with a current run rate/ARR of ~ $2.9M (vs $1.2M for full-year 2025), >40,500 paid subscribers (up >230% YoY) and RaceControl now ~18% of H1 revenue; total company H1 revenue was $7.6M (up 74% YoY) with gross profit $6.4M (up 86.9%) and gross margin 84.7% (vs 78.8% a year ago); adjusted EBITDA was $0.8M in Q2 (Q2 2025: $1.4M) and $2.2M for H1 (vs $1.0M, +122.7%), adjusted diluted EPS was $0.19 in Q2 ($0.25 prior year) and $0.33 for H1 ($0.24 prior year), GAAP net income remained positive for a sixth consecutive quarter with H1 GAAP net income $1.2M (vs $5.3M last year driven by nonrecurring gains), operating cash flow averaged ≈ $0.5M/month, cash and cash equivalents were $3.9M at June 30, 2026, the company repurchased $3.7M of Class A shares (retiring Class B super-voting shares), and it has a $3M Citibank revolver with $1.2M drawn (maturity extended to Feb 2028); product roadmap commentary included the July v1.4 U.S. Track Pack (Daytona, Laguna Seca) with Packs 2 and 3 expected in September and December, consoles development “continues as planned,” and management said RaceControl is expected to be a recurring, predictable, high‑margin growth engine but declined to quantify year‑end targets.Motorsport Games Financial Statement Overview
Summary
Income Statement
63
Positive
Balance Sheet
58
Neutral
Cash Flow
78
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Mar 2024 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 14.52M | 11.30M | 8.69M | 6.91M | 10.32M | 15.08M |
| Gross Profit | 12.13M | 9.16M | 5.46M | 3.29M | 5.36M | 7.55M |
| EBITDA | -1.19M | 7.74M | -337.88K | -11.43M | -33.63M | -31.42M |
| Net Income | 2.35M | 6.93M | -2.75M | -14.32M | -35.99M | -33.16M |
Balance Sheet | ||||||
| Total Assets | 11.32M | 11.97M | 6.27M | 9.76M | 18.90M | 50.70M |
| Cash, Cash Equivalents and Short-Term Investments | 3.95M | 4.99M | 859.27K | 1.68M | 979.31K | 17.82M |
| Total Debt | 1.43M | 17.57K | 47.41K | 198.67K | 997.83K | 119.02K |
| Total Liabilities | 6.08M | 4.39M | 5.04M | 7.67M | 16.99M | 12.72M |
| Stockholders Equity | 3.88M | 6.78M | 496.26K | 1.04M | 1.53M | 36.72M |
Cash Flow | ||||||
| Free Cash Flow | 6.42M | 4.06M | -2.86M | -13.71M | -19.81M | -21.70M |
| Operating Cash Flow | 6.57M | 4.07M | -2.84M | -12.92M | -19.52M | -20.94M |
| Investing Cash Flow | -1.79M | -1.12M | 1.18M | 4.21M | -292.45K | -14.39M |
| Financing Cash Flow | -3.32M | 1.06M | 834.05K | 9.94M | 1.71M | 49.26M |
Motorsport Games Risk Analysis
Motorsport Games disclosed 67 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
UnderperformOutperform
Sector (60)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $79.42B | 16.32 | 20.04% | 2.53% | 9.83% | -2.22% | |
65 Neutral | $18.40M | 9.07 | 101.28% | ― | 78.65% | ― | |
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% | |
56 Neutral | $43.65B | -134.68 | -9.12% | ― | 15.30% | 92.77% | |
55 Neutral | $43.85M | -0.65 | -169.79% | ― | -27.74% | 48.59% | |
51 Neutral | $26.83B | -26.68 | -288.77% | ― | 41.33% | 0.75% |
* Communication Services Sector Average
MSGM
Motorsport Games
3.90
0.99
34.02%
NTES
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38.15
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Motorsport Games Corporate Events
Business Operations and StrategyExecutive/Board ChangesStock BuybackFinancial Disclosures
Motorsport Games Posts Sixth Straight Profitable Quarter
Positive
Aug 14, 2026
On August 14, 2026, Motorsport Games reported its second-quarter 2026 results, highlighting a sixth consecutive quarter of profitability and strong year-over-year revenue growth. Revenues rose to $3.5 million in Q2 2026 and $7.6 million for the fi...
Business Operations and StrategyRegulatory Filings and ComplianceShareholder Meetings
Motorsport Games Strengthens Control Through New Bylaws
Neutral
Jul 23, 2026
On July 22, 2026, Motorsport Games’ board adopted Amended and Restated Bylaws that significantly expand the board’s and meeting chair’s control over the conduct of stockholder meetings, including setting agendas, limiting attenda...
Business Operations and Strategy
Motorsport Games Adopts Short-Term Stockholder Rights Plan
Neutral
Jul 23, 2026
On July 22, 2026, Motorsport Games Inc. adopted a limited-duration stockholder rights plan, or “poison pill,” and declared a dividend of one right for each Class A common share to holders of record on August 3, 2026, with the plan set ...
Business Operations and StrategyExecutive/Board Changes
Motorsport Games Adds CEO Stephen Hood to Board
Positive
Jun 26, 2026
On June 25, 2026, Motorsport Games Inc. expanded its Board of Directors from four to five members and appointed Chief Executive Officer and President Stephen Hood as a Class II director, with his term running until the 2028 annual meeting of stock...
Business Operations and StrategyExecutive/Board Changes
Motorsport Games Restructures Finance Leadership, Appoints New CFO
Positive
Jun 18, 2026
Motorsport Games announced on June 18, 2026 that it will appoint executive advisor Peter Hansen-Chambers as Chief Financial Officer and transition current CFO Stanley Beckley to the newly created role of Chief Accounting and Compliance Officer, bo...
Business Operations and StrategyPrivate Placements and Financing
Motorsport Games Extends Loan Maturity and Revises Covenants
Positive
Jun 18, 2026
On June 15, 2026, Motorsport Games Inc. amended its business loan agreement with Citibank, N.A., which provides the company with a revolving line of credit, by revising the definition of its Fixed Charge Coverage Ratio to include cash interest exp...
Business Operations and StrategyRegulatory Filings and ComplianceShareholder Meetings
Motorsport Games Strengthens Board Control With Governance Amendments
Neutral
May 26, 2026
On April 22, 2025, a stockholder holding at least two thirds of the voting power of Motorsport Games’ Class A and Class B shares approved amendments to the company’s Certificate of Incorporation and Bylaws, which became effective on Ma...
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.