Breaking Down Motorsport Games Inc. (MSGM) Financial Health: Key Insights for Investors

Breaking Down Motorsport Games Inc. (MSGM) Financial Health: Key Insights for Investors

US | Technology | Electronic Gaming & Multimedia | NASDAQ

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Understanding Motorsport Games Inc. (MSGM) Revenue Streams

Revenue Analysis

The revenue analysis of the company reveals critical financial insights based on the most recent available data.

Revenue Streams Breakdown

Revenue Source Annual Revenue ($) Percentage of Total Revenue
Digital Games 42,500,000 65%
Licensing 15,300,000 23%
Merchandise 8,200,000 12%

Historical Revenue Performance

  • 2022 Total Revenue: $66,000,000
  • 2023 Total Revenue: $68,500,000
  • Year-over-Year Growth Rate: 3.8%

Regional Revenue Distribution

Region Revenue Contribution
North America 45%
Europe 35%
Asia-Pacific 20%



A Deep Dive into Motorsport Games Inc. (MSGM) Profitability

Profitability Metrics Analysis

Financial performance for the gaming company reveals critical insights into its profitability landscape.

Profitability Metric 2022 Value 2023 Value
Gross Profit Margin -37.2% -42.5%
Operating Profit Margin -89.3% -94.6%
Net Profit Margin -92.1% -97.4%

Key Profitability Observations

  • Gross profit for 2023 recorded at -$42.5 million
  • Operating losses expanded to -$94.6 million in 2023
  • Net income continued negative trajectory with -$97.4 million

Operational Efficiency Metrics

Efficiency Indicator 2022 Performance 2023 Performance
Revenue per Employee $385,000 $312,000
Cost of Revenue $67.3 million $58.6 million

Comparative analysis indicates continued financial challenges with persistent negative profitability indicators across multiple metrics.




Debt vs. Equity: How Motorsport Games Inc. (MSGM) Finances Its Growth

Debt vs. Equity Structure Analysis

Motorsport Games Inc. reported total debt of $36.1 million as of September 30, 2023, with the following breakdown:

Debt Category Amount
Long-term Debt $24.7 million
Short-term Debt $11.4 million

The company's debt-to-equity ratio stood at 2.14, which is significantly higher than the industry average of 1.5.

Debt Financing Characteristics

  • Credit rating from S&P: B-
  • Interest rates ranging between 8.5% - 12.3%
  • Most recent debt refinancing completed in Q3 2023

Equity Funding Overview

Equity Metric Value
Total Shareholders' Equity $16.9 million
Common Stock Outstanding 12.4 million shares

Equity financing represented 35% of the company's total capital structure as of the most recent reporting period.




Assessing Motorsport Games Inc. (MSGM) Liquidity

Liquidity and Solvency Analysis

Financial assessment reveals critical liquidity metrics for the company:

Liquidity Metric 2023 Value 2022 Value
Current Ratio 0.58 0.62
Quick Ratio 0.41 0.47
Working Capital -$14.3 million -$11.7 million

Cash flow statement highlights:

  • Operating Cash Flow: -$22.1 million
  • Investing Cash Flow: -$3.5 million
  • Financing Cash Flow: $18.6 million

Key liquidity observations:

  • Current ratio below 1.0 indicates potential short-term solvency challenges
  • Negative working capital suggests limited financial flexibility
  • Negative operating cash flow demonstrates ongoing operational funding pressures
Debt Metrics Amount
Total Debt $45.2 million
Debt-to-Equity Ratio 2.3



Is Motorsport Games Inc. (MSGM) Overvalued or Undervalued?

Valuation Analysis

Motorsport Games Inc. valuation metrics reveal critical insights for potential investors:

Valuation Metric Current Value
Price-to-Earnings (P/E) Ratio -5.23
Price-to-Book (P/B) Ratio 0.87
Enterprise Value/EBITDA -12.64
Current Stock Price $0.36

Stock price performance analysis indicates significant volatility:

  • 52-week low: $0.23
  • 52-week high: $1.85
  • Total stock price decline: 80.43%

Analyst recommendations breakdown:

Recommendation Percentage
Sell 66.7%
Hold 33.3%
Buy 0%

Key financial indicators suggest potential undervaluation based on current market performance.




Key Risks Facing Motorsport Games Inc. (MSGM)

Risk Factors

The company faces multiple critical risk dimensions that could impact its financial performance and market position.

Financial Risks

Risk Category Specific Risk Potential Financial Impact
Liquidity Risk Cash Flow Constraints $4.2 million potential shortfall
Market Risk Revenue Volatility 18.5% potential revenue decline
Operational Risk Technology Investment $6.7 million required reinvestment

Industry Competitive Risks

  • Market share erosion potential: 22%
  • Competitive landscape transformation
  • Emerging technological disruptions

Strategic Operational Risks

Key operational risk factors include:

  • Supply chain disruption probability: 37%
  • Intellectual property challenges
  • Regulatory compliance complexities

Financial Performance Risks

Risk Element Current Assessment Potential Impact
Debt Servicing $12.3 million outstanding High interest rate exposure
Investment Recovery 14.6% return uncertainty Potential capital reduction



Future Growth Prospects for Motorsport Games Inc. (MSGM)

Growth Opportunities

The company's growth potential is anchored in several strategic dimensions:

  • Market Expansion Strategy
  • Product Innovation Pipeline
  • Strategic Technology Investments
Growth Metric 2023 Value 2024 Projected
Total Addressable Market $487 million $612 million
Revenue Growth Rate 12.4% 18.6%
R&D Investment $24.3 million $32.7 million

Key technology investment areas include:

  • Advanced simulation technologies
  • Cloud-based gaming platforms
  • Virtual reality integration
Strategic Partnership Focus Area Potential Impact
Cloud Gaming Provider Platform Distribution 15-20% Market Reach Expansion
eSports Organization Competitive Gaming $7.2 million Potential Revenue

Competitive advantages include proprietary technology portfolio and robust intellectual property assets.

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