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

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

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 Price Performance

NASDAQ MSGM opened at $4.44 on Friday. Motorsport Games has a 12 month low of $2.11 and a 12 month high of $5.56. The firm has a market capitalization of $18.51 million, a PE ratio of 3.79, a P/E/G ratio of 0.78 and a beta of 1.71. The company’s 50 day simple moving average is $4.30 and its 200 day simple moving average is $4.17.

Analysts Set New Price Targets

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

Insiders Place Their Bets

In other news, major shareholder Red Oak Partners, Llc purchased 12,737 shares of the firm’s stock in a transaction on Thursday, July 2nd. The stock was purchased at an average cost of $4.14 per share, with a total value of $52,731.18. Following the purchase, the insider owned 295,881 shares in the company, valued at $1,224,947.34. This trade represents a 4.50% increase in their position. The transaction was disclosed in a document filed with the SEC, which is available through this hyperlink. Insiders purchased 43,681 shares of company stock valued at $175,344 in the last three months. Corporate insiders own 4.59% of the company’s stock.

Institutional Trading of Motorsport Games

Hedge funds and other institutional investors have recently modified their holdings of the company. XTX Topco Ltd acquired a new stake in shares of Motorsport Games in the fourth quarter valued at $34,000. HRT Financial LP acquired a new position in Motorsport Games during the fourth quarter worth about $37,000. State Street Corp acquired a new position in Motorsport Games during the fourth quarter worth about $39,000. Finally, Dimensional Fund Advisors LP bought a new stake in Motorsport Games in the third quarter worth about $46,000. Institutional investors 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).