Yahoo Finance Breakeven On The Horizon For Motorsport Games Inc. (NASDAQ:MSGM)
We feel now is a pretty good time to analyse Motorsport Games Inc.'s (NASDAQ:MSGM) business as it appears the company may be on the cusp of a considerable accomplishment. Motorsport Games Inc. develops and publishes multi-platform racing video games in the United States. The US$164m market-cap company posted a loss in its most recent financial year of US$1.8m and a latest trailing-twelve-month loss of US$21m leading to an even wider gap between loss and breakeven. Many investors are wondering about the rate at which Motorsport Games will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.
Check out our latest analysis for Motorsport Games
Consensus from 4 of the American Entertainment analysts is that Motorsport Games is on the verge of breakeven. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$3.2m in 2023. Therefore, the company is expected to breakeven roughly 2 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 83% year-on-year, on average, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Given this is a high-level overview, we won’t go into details of Motorsport Games' upcoming projects, however, keep in mind that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 0.5% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.
Next Steps:
There are too many aspects of Motorsport Games to cover in one brief article, but the key fundamentals for the company can all be found in one place – Motorsport Games' company page on Simply Wall St. We've also put together a list of relevant factors you should look at:
Historical Track Record: What has Motorsport Games' performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Motorsport Games' board and the CEO’s background.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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