Motorsport Games (NASDAQ:MSGM) Posts Quarterly Earnings Results, Beats Expectations By $0.17 EPS

Motorsport Games (NASDAQ:MSGM) issued its earnings results on Friday. The company reported $0.19 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.02 by $0.17, FiscalAI reports. The company had revenue of $3.54 million for the quarter, compared to analysts’ expectations of $2.90 million. Motorsport Games had a net margin of 45.70% and a return on equity of 87.43%.

Here are the key takeaways from Motorsport Games’ conference call:

• First-half revenue rose 74% year over year to $7.6 million, while gross margin expanded to 84.7% from 78.8%; the company also reported its sixth consecutive quarter of positive GAAP net income.
• RaceControl continued its rapid growth, with first-half subscription revenue increasing nearly 349% to approximately $1.4 million, annual recurring revenue reaching $2.9 million, and paid subscribers exceeding 40,500.
• Le Mans Ultimate surpassed 500,000 base-game sales and 1.2 million DLC sales, with player engagement accelerating; the US Track Pass featuring Daytona and Laguna Seca reportedly launched above management’s expectations.
• Development of PlayStation and Xbox versions of Le Mans Ultimate remains on plan, but management emphasized that bringing the high-fidelity simulation to consoles is complex and did not provide a launch date.
• Cash was $3.9 million at quarter-end after the company spent $3.7 million repurchasing Class A shares and had drawn $1.2 million of a $3 million revolving credit facility, limiting near-term financial flexibility despite positive operating cash flow.

Motorsport Games Stock Down 0.9%

Shares of NASDAQ MSGM opened at $4.44 on Friday. The stock has a market capitalization of $18.51 million, a price-to-earnings ratio of 10.33, a price-to-earnings-growth ratio of 0.77 and a beta of 1.71. Motorsport Games has a 52 week low of $2.11 and a 52 week high of $5.56. The firm has a 50-day simple moving average of $4.30 and a 200-day simple moving average of $4.17.

Wall Street Analysts Forecast Growth

Several equities analysts have issued reports on MSGM shares. Zacks Research raised shares of Motorsport Games to a “hold” rating in a report on Wednesday, July 1st. Wall Street Zen cut Motorsport Games from a “strong-buy” rating to a “buy” rating in a research report on Sunday, June 7th. Finally, Weiss Ratings raised shares of Motorsport Games from a “sell (d+)” rating to a “hold (c-)” rating in a research report on Friday, July 10th. Two investment analysts have rated the stock with a Hold rating, Based on data from MarketBeat.com, Motorsport Games presently has a consensus rating of “Hold”.

Insider Buying and Selling

In related news, major shareholder Red Oak Partners, Llc purchased 27,744 shares of Motorsport Games stock in a transaction dated Tuesday, June 30th. The shares were acquired at an average price of $3.95 per share, for a total transaction of $109,588.80. Following the acquisition, the insider directly owned 285,611 shares in the company, valued at approximately $1,128,163.45. The trade was a 10.76% increase in their ownership of the stock. The purchase was disclosed in a filing with the Securities & Exchange Commission, which is available at this hyperlink. Insiders purchased a total of 43,681 shares of company stock worth $175,344 in the last quarter. Company insiders own 4.59% of the company’s stock.

Institutional Inflows and Outflows

A number of large investors have recently bought and sold shares of MSGM. XTX Topco Ltd acquired a new stake in Motorsport Games in the 4th quarter valued at approximately $34,000. HRT Financial LP acquired a new position in shares of Motorsport Games in the fourth quarter valued at approximately $37,000. State Street Corp purchased a new stake in Motorsport Games during the 4th quarter worth approximately $39,000. Finally, Dimensional Fund Advisors LP purchased a new stake in Motorsport Games during the 3rd quarter worth approximately $46,000. Institutional investors and hedge funds own 1.66% of the company’s stock.

About Motorsport Games

Motorsport Games, Inc is a publicly traded developer and publisher of interactive motorsport entertainment, headquartered in Miami, Florida. The company specializes in creating officially licensed racing simulation titles and managing associated esports competitions. By focusing exclusively on the motorsport genre, Motorsport Games aims to deliver authentic digital experiences that mirror the rules, tracks and vehicles of real-world racing series.

The company’s core activities include the development of video games under licenses from major sanctioning bodies such as NASCAR, the Fédération Internationale de l’Automobile (FIA) and International Motor Sports Association (IMSA).