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Relative valuation derived from Technology sector median benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Multiples adjusted for extreme outliers and non-recurring volatility.
Auditing capital efficiency...
Quality Profile Audit
Score: 31.2GRADE D
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation.
Return on Equity
Profit generated per dollar of shareholder equity
72.0%
Sector: -1.4%
Dividend Analysis audit
No Dividend
This company does not currently pay a dividend.
Analyst Projections
Analyst Consensus
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Based on our 6-factor quantitative model, Motorsport Games Inc. (MSGM) receives a "Hold" rating with a composite score of 49.7/100, ranked #593 out of 4446 stocks. Key factor scores: Quality 31/100, Value 78/100, Momentum 74/100. This is quantitative analysis only — not investment advice.
Motorsport Games Inc. (MSGM) Stock Analysis — April 2026 Rating, Price, and Forecast
Company Overview — What Does Motorsport Games Inc. Do?
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. Motorsport Games Inc. (MSGM) is classified as a micro-cap stock in the Technology sector, specifically within the Computer Software industry. The company is led by CEO Dmitry Kozko and employs approximately 190 people. With a market capitalization of $21M, MSGM is one of the notable companies in the Technology sector.
Motorsport Games Inc. (MSGM) Stock Rating — Hold (April 2026)
As of April 2026, Motorsport Games Inc. receives a Hold rating with a composite score of 49.7/100 and 3 out of 5 stars from the Blank Capital Research quantitative model.MSGM ranks #593 out of 4,446 stocks in our coverage universe. Within the Technology sector, Motorsport Games Inc. ranks #46 of 584 stocks, placing it in the top 10% of its Technology peers. The rating is generated by a multi-factor model that weighs quality (30%), momentum (25%), value (15%), investment (10%), stability (10%), and short interest (10%).
MSGM Stock Price and 52-Week Range
Motorsport Games Inc. (MSGM) currently trades at $3.69. The stock lost $0.02 (0.5%) in the most recent trading session. The 52-week high for MSGM is $5.41, which means the stock is currently trading -31.8% from its annual peak. The 52-week low is $0.73, putting the stock 405.2% above its annual trough. Recent trading volume was 48K shares, suggesting relatively thin trading activity.
Is MSGM Overvalued or Undervalued? — Valuation Analysis
Motorsport Games Inc. (MSGM) carries a value factor score of 78/100 in the Blank Capital model, suggesting the stock trades at a meaningful discount to its fundamental earning power. The trailing price-to-earnings ratio is 3.61x, compared to the Technology sector average of 45.27x — a discount of 92%. The price-to-book ratio stands at 2.60x, versus the sector average of 3.16x. The price-to-sales ratio is 2.13x, compared to 1.06x for the average Technology stock. On an enterprise value basis, MSGM trades at 3.75x EV/EBITDA, versus 12.79x for the sector.
Based on these multiples, Motorsport Games Inc. appears attractively valued relative to both its sector peers and the broader market. Value-oriented investors may find the current entry point compelling, particularly if the company's fundamental quality metrics also score well.
Motorsport Games Inc. Profitability — ROE, Margins, and Quality Score
Motorsport Games Inc. (MSGM) earns a quality factor score of 31/100, signaling below-average profitability metrics relative to the broader market. The return on equity (ROE) is 72.0%, compared to the Technology sector average of -1.4%, which demonstrates strong shareholder value creation. Return on assets (ROA) comes in at 45.6% versus the sector average of -1.0%.
On a margin basis, Motorsport Games Inc. reports gross margins of 74.2%, compared to 50.9% for the sector. The operating margin is -2.7% (sector: -0.5%). Net profit margin stands at 53.7%, versus -1.5% for the average Technology stock. Revenue growth is running at 64.8% on a trailing basis, compared to 14.2% for the sector. Profitability is below benchmark levels, which may reflect industry headwinds, elevated reinvestment, or structural challenges.
MSGM Debt, Balance Sheet, and Financial Health
Motorsport Games Inc. has a debt-to-equity ratio of 58.0%, compared to the Technology sector average of 43.0%. Leverage is within a manageable range for the industry, though investors should monitor debt trends over time. The current ratio is 2.25x, indicating strong short-term liquidity. Total debt on the balance sheet is $0. Cash and equivalents stand at $4M.
MSGM has a beta of 0.66, meaning it is less volatile than the S&P 500, making it a relatively defensive holding. The stability factor score for Motorsport Games Inc. is 31/100, suggesting elevated price swings that may be unsuitable for conservative portfolios.
Motorsport Games Inc. Revenue and Earnings History — Quarterly Trend
In TTM 2026, Motorsport Games Inc. reported revenue of $9M and earnings per share (EPS) of $1.43. Net income for the quarter was $5M. Gross margin was 74.2%. Operating income came in at $741,931.
In FY 2025, Motorsport Games Inc. reported revenue of $11M and earnings per share (EPS) of $1.43. Net income for the quarter was $7M. Gross margin was 81.5%. Revenue grew 30.0% year-over-year compared to FY 2024. Operating income came in at $3M.
In Q3 2025, Motorsport Games Inc. reported revenue of $3M and earnings per share (EPS) of $0.14. Net income for the quarter was $768,537. Gross margin was 80.7%. Revenue grew 71.9% year-over-year compared to Q3 2024. Operating income came in at $798,948.
In Q2 2025, Motorsport Games Inc. reported revenue of $3M and earnings per share (EPS) of $0.82. Net income for the quarter was $4M. Gross margin was 82.5%. Revenue grew 37.7% year-over-year compared to Q2 2024. Operating income came in at $2M.
Over the past 8 quarters, Motorsport Games Inc. has demonstrated a growth trajectory, with revenue expanding from $2M to $9M. Investors analyzing MSGM stock should weigh these quarterly trends alongside the valuation and quality metrics discussed above.
MSGM Dividend Yield and Income Analysis
Motorsport Games Inc. (MSGM) does not currently pay a dividend. This is common among smaller companies in the Computer Software industry that prefer to reinvest cash flows into business expansion rather than returning capital to shareholders. Income-focused investors looking for Technology dividend stocks may want to explore other Technology stocks or use the stock screener to filter by dividend yield.
MSGM Momentum and Technical Analysis Profile
Motorsport Games Inc. (MSGM) has a momentum factor score of 74/100, indicating strong price momentum with the stock outperforming the majority of the market over recent periods. Stocks with high momentum scores have historically tended to continue their outperformance in the near term. The investment factor score is 22/100, which measures capital allocation efficiency and asset growth patterns. The short interest score of 48/100 reflects moderate short selling activity.
MSGM vs Competitors — Technology Sector Ranking and Peer Comparison
Within the Technology sector, Motorsport Games Inc. (MSGM) ranks #46 out of 584 stocks based on the Blank Capital composite score. This places MSGM in the top decile of all Technology stocks in our coverage universe. Key competitors and sector peers include IHS Holding Ltd (IHS) with a score of 55.0/100, VERISIGN INC/CA (VRSN) with a score of 56.0/100, ESCO TECHNOLOGIES INC (ESE) with a score of 51.7/100, CareCloud, Inc. (CCLD) with a score of 46.9/100, and MMTec, Inc. (MTC) with a score of 47.4/100.
Comparing MSGM against the S&P 500 benchmark is also instructive for understanding relative performance. Investors can view the full MSGM vs S&P 500 (SPY) comparison to assess how Motorsport Games Inc. stacks up against the broader market across all factor dimensions.
MSGM Next Earnings Date
No upcoming earnings date has been announced for Motorsport Games Inc. (MSGM) at this time. Check the earnings calendar for the latest scheduling updates across all stocks in our coverage universe.
Should You Buy MSGM? — Investment Thesis Summary
Motorsport Games Inc. presents a balanced picture with arguments on both sides. The quality score of 31/100 flags below-average profitability. The value score of 78/100 suggests attractive pricing relative to fundamentals. Price momentum is positive at 74/100, suggesting the trend favors buyers. High volatility (stability score 31/100) increases portfolio risk.
In summary, Motorsport Games Inc. (MSGM) earns a Hold rating with a composite score of 49.7/100 as of April 2026. The rating is derived from the Blank Capital Research methodology, which combines six factor dimensions into a single quantitative ranking. Investors should consider these quantitative signals alongside their own fundamental research, risk tolerance, and investment time horizon before making buy or sell decisions on MSGM stock.
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Institutional Research Dossier
Motorsport Games Inc. (MSGM) Deep Dive Analysis
Published on March 24, 2026
Action RatingHold
Sections
Executive Summary
Motorsport Games Inc. (MSGM) currently holds a BCR Action Rating of Hold, a 3-star rating reflecting a composite score of 49.3/100. This rating is primarily driven by a mixed financial profile: strong value and momentum scores are offset by weak quality, investment, and stability metrics. While the company exhibits compelling valuation multiples relative to the technology sector, its underlying profitability and capital allocation strategies warrant caution, justifying the neutral Hold rating.
The critical takeaway is that MSGM presents a speculative investment opportunity. Its recent revenue growth and profitability improvements are encouraging, but the company's history of losses and negative free cash flow raise concerns about its long-term sustainability. Investors should closely monitor MSGM's ability to maintain its growth trajectory and improve its operational efficiency before considering a more bullish stance.
Business Strategy & Overview
Motorsport Games Inc. operates within the racing video game and esports industry, focusing on developing and publishing multi-platform games for consoles, PCs, and mobile devices. The company generates revenue through direct sales of its games via retail and digital channels, as well as through downloadable content and in-game purchases. A significant portion of MSGM's strategy revolves around securing licenses for popular racing series, such as NASCAR, to create authentic and immersive gaming experiences. This licensing strategy aims to attract a dedicated fanbase and establish a competitive advantage within the racing game market.
In addition to game development, Motorsport Games actively organizes and facilitates esports tournaments and events centered around its licensed racing games. This esports component serves as a marketing tool, driving engagement with the games and creating additional revenue streams through sponsorships, broadcasting rights, and event participation fees. The company also provides esports services to third-party racing game developers and publishers, diversifying its revenue base and leveraging its expertise in the esports space.
MSGM's strategic positioning hinges on its ability to secure and maintain valuable racing licenses, develop high-quality games that resonate with racing fans, and effectively monetize its esports initiatives. The company's product pipeline likely includes new game releases, downloadable content updates, and expansions of its esports offerings. However, the success of this strategy depends on factors such as the quality of its games, the popularity of the licensed racing series, and the company's ability to compete with larger, more established players in the gaming and esports industries.
The broader industry context is characterized by intense competition, rapid technological advancements, and evolving consumer preferences. Motorsport Games faces competition from established gaming giants with larger budgets and broader portfolios, as well as from smaller independent developers. The company must continuously innovate and adapt to stay ahead of the curve and maintain its relevance in the market. The shift towards digital distribution and the growing popularity of esports present both opportunities and challenges for MSGM.
Execution Benchmarks audit
Revenue Growth
YOY expansion rate
64.8%
Sector: 14.2%
+355% VS SCTR
Economic Moat Analysis
Motorsport Games' economic moat is best characterized as Narrow, primarily stemming from intangible assets in the form of licensing agreements with major motorsport organizations. These licenses, particularly those for prominent racing series like NASCAR, provide a degree of exclusivity and brand recognition that competitors find difficult to replicate. The value of these licenses lies in their ability to attract a dedicated fanbase and create authentic gaming experiences, which are crucial for success in the racing game genre.
However, the moat is not wide due to several factors. Firstly, licensing agreements are typically time-limited and subject to renewal, meaning that MSGM must continually renegotiate and potentially outbid competitors to retain these valuable assets. The cost of acquiring and maintaining these licenses can be substantial, impacting the company's profitability. Secondly, the quality of the games themselves is paramount. Even with a strong license, a poorly executed game will fail to resonate with consumers and erode the value of the license.
Furthermore, the racing game market is highly competitive, with established players like Electronic Arts (EA) and Codemasters possessing significant resources and expertise. These larger companies can invest heavily in game development, marketing, and distribution, making it challenging for MSGM to compete on a level playing field. The presence of these well-funded competitors limits MSGM's pricing power and ability to generate consistently high returns.
While MSGM's esports initiatives offer some potential for network effects, these are currently limited in scope. The company's esports tournaments and events primarily serve as marketing tools for its games, rather than generating significant independent revenue streams. To build a stronger network effect, MSGM would need to create a more robust and engaging esports ecosystem that attracts a large and active community of players and viewers.
In summary, Motorsport Games possesses a narrow moat based on its licensing agreements, but this moat is vulnerable to competition, renewal risks, and the need for continuous investment in game development. The company's ability to widen its moat will depend on its success in securing long-term licenses, developing high-quality games, and building a thriving esports community.
Financial Health & Profitability
Motorsport Games' financial health presents a mixed picture. The company's recent revenue growth is impressive, with a TTM revenue of $11.30 million representing a 64.8% increase compared to the sector average of 14.0%. This growth is further highlighted by the FY2025 revenue of $11.30M, a significant jump from $8.69M in FY2024 and $6.91M in FY2023. However, this growth has not always translated into consistent profitability.
While the TTM net income is a positive $6.84 million, driven by a net margin of 53.7% (significantly higher than the sector average of -1.5%), a closer look at the quarterly history reveals volatility. For example, Q2 FY2025 showed a substantial net income of $4.24M, while FY2024 and FY2023 saw net losses of $3.05M and $14.32M, respectively. This inconsistency raises concerns about the sustainability of the recent profitability.
The company's gross margin is strong at 74.2%, exceeding the sector average of 51.2%. However, the operating margin is negative at -2.7%, although this is better than the sector average of -0.5%. The quarterly data shows significant fluctuations in operating margin, ranging from -495.3% in Q2 FY2023 to 75.9% in Q2 FY2025, indicating a lack of operational stability.
MSGM's balance sheet appears relatively healthy, with total cash of $4.13 million and no debt. The current ratio of 2.25 suggests a strong ability to meet short-term obligations. However, the negative free cash flow of $-447,281 raises concerns about the company's ability to generate cash from its operations. The company's ROE is exceptionally high at 72.0%, but this is likely due to the recent net income surge and may not be sustainable in the long term.
Overall, Motorsport Games' financial health is characterized by strong revenue growth and recent profitability improvements, but also by volatility, negative free cash flow, and a history of losses. While the balance sheet is relatively healthy, the company needs to demonstrate consistent profitability and cash flow generation to solidify its financial position.
Valuation Assessment
Motorsport Games' valuation presents a compelling case for value investors, but requires careful consideration of its volatile earnings history. The company's P/E ratio of 2.9x is significantly below the technology sector average of 45.3x, suggesting that the stock is undervalued based on its current earnings. Similarly, the EV/EBITDA multiple of 1.6x is substantially lower than the sector average of 13.0x, further reinforcing the perception of undervaluation.
However, these low multiples are based on the company's recent surge in profitability, which may not be sustainable. The historical data reveals a history of losses and negative free cash flow, which could justify a lower valuation. Investors should be cautious about extrapolating the current earnings into the future without considering the company's past performance and the inherent risks of the gaming industry.
A more conservative valuation approach would involve considering the company's historical revenue growth and profitability trends. While the recent revenue growth of 64.8% is impressive, it is important to assess whether this growth is sustainable in the long term. The company's negative free cash flow also raises concerns about its ability to fund future growth and investments.
Given the company's volatile earnings history and negative free cash flow, a discounted cash flow (DCF) analysis would be challenging to perform accurately. However, a relative valuation approach, comparing MSGM's multiples to those of its peers in the racing game and esports industries, could provide a more realistic assessment of its fair value. It is important to consider the size, growth prospects, and profitability of these peer companies when making comparisons.
In conclusion, Motorsport Games appears to be undervalued based on its current earnings multiples, but this undervaluation is justified by its volatile earnings history and negative free cash flow. Investors should carefully consider the company's long-term growth prospects and profitability potential before making an investment decision. A more conservative valuation approach, such as a relative valuation or a sensitivity analysis of the DCF model, is recommended.
Risk & Uncertainty
Motorsport Games faces several specific risks that could negatively impact its business and financial performance. One of the most significant risks is its reliance on licensing agreements with major motorsport organizations. The loss of a key license, such as NASCAR, would have a material adverse effect on the company's revenue and profitability. These licenses are typically time-limited and subject to renewal, meaning that MSGM must continually renegotiate and potentially outbid competitors to retain them. The cost of acquiring and maintaining these licenses can also be substantial, impacting the company's financial resources.
Another significant risk is the intense competition in the gaming and esports industries. Motorsport Games competes with larger, more established players with greater financial resources and broader portfolios. These competitors can invest heavily in game development, marketing, and distribution, making it challenging for MSGM to compete effectively. The company's ability to innovate and develop high-quality games that resonate with consumers is crucial for its long-term success.
The company's history of losses and negative free cash flow also poses a risk. While MSGM has recently achieved profitability, its past performance raises concerns about its ability to sustain this profitability in the long term. Negative free cash flow could limit the company's ability to fund future growth and investments, potentially hindering its competitiveness.
Furthermore, the gaming industry is subject to rapid technological advancements and evolving consumer preferences. Motorsport Games must continuously adapt to these changes to remain relevant and competitive. Failure to keep pace with technological advancements or to anticipate changing consumer preferences could lead to a decline in sales and market share.
Bulls Say / Bears Say
The Bull Case
BULL VIEWMotorsport Games' recent profitability and revenue growth demonstrate a successful turnaround, making its current valuation a bargain.
BULL VIEWThe company's exclusive licensing agreements with major motorsport organizations provide a sustainable competitive advantage and a loyal customer base.
BULL VIEWMSGM's expansion into esports creates new revenue streams and enhances brand engagement, driving long-term growth.
The Bear Case
BEAR VIEWMotorsport Games' history of losses and negative free cash flow raises concerns about its long-term financial sustainability.
BEAR VIEWThe company's reliance on licensing agreements makes it vulnerable to competition and renewal risks, limiting its economic moat.
BEAR VIEWMSGM's small size and limited resources make it difficult to compete with larger, more established players in the gaming industry.
About the Author
Marques Blank
Founder & Chief Investment Officer, Blank Capital
Marques brings 15 years of institutional finance and investing experience, having overseen financial planning for a $1.6B defense business unit. He developed the proprietary 6-factor quantitative model used to score MSGM and 4,400+ other equities.
Motorsport Games Inc. exhibits a 20% valuation discount relative to institutional benchmarks. This represents a constructive entry window based on current multiples.
Return on Assets
Efficiency of asset utilization
45.6%
Sector: -1.0%
Gross Margin
Pricing power and cost efficiency
74.2%
Sector: 50.9%
Operating Margin
Core business profitability
-2.7%
Sector: -0.5%
Net Margin
Bottom-line profitability
53.7%
Sector: -1.5%
Factor Methodology
The Quality factor evaluates the persistence and magnitude of cash flows. Companies with scores >70 exhibit superior competitive moats and financial resilience through economic cycles.
