Critical Survey: Motorsport Games (NASDAQ:MSGM) and TKO Group (NYSE:TKO)

Motorsport Games (NASDAQ:MSGM) and TKO Group (NYSE:TKO) are both communication services companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, institutional ownership, profitability, risk, valuation and earnings.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Motorsport Games and TKO Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Motorsport Games	0	1	0	1	3.00
TKO Group	0	6	10	0	2.62

TKO Group has a consensus price target of $237.50, indicating a potential upside of 29.79%. Given TKO Group’s higher probable upside, analysts plainly believe TKO Group is more favorable than Motorsport Games.

Valuation and Earnings

This table compares Motorsport Games and TKO Group”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Motorsport Games	$11.30 million	1.58	$6.93 million	$0.43	9.95
TKO Group	$4.74 billion	7.31	$195.40 million	$2.85	64.21

TKO Group has higher revenue and earnings than Motorsport Games. Motorsport Games is trading at a lower price-to-earnings ratio than TKO Group, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Motorsport Games and TKO Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Motorsport Games	16.15%	41.13%	24.51%
TKO Group	4.33%	2.67%	1.49%

Insider and Institutional Ownership

1.7% of Motorsport Games shares are owned by institutional investors. Comparatively, 89.8% of TKO Group shares are owned by institutional investors. 4.6% of Motorsport Games shares are owned by company insiders. Comparatively, 64.3% of TKO Group shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Risk and Volatility

Motorsport Games has a beta of 1.71, meaning that its stock price is 71% more volatile than the S&P 500. Comparatively, TKO Group has a beta of 0.62, meaning that its stock price is 38% less volatile than the S&P 500.

Summary

TKO Group beats Motorsport Games on 9 of the 15 factors compared between the two stocks.

About Motorsport Games

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 rFactor 2, a realistic racing simulation game; NASCAR Heat Mobile, a racing experience for mobile devices; NASCAR Heat 3, NASCAR Heat 4, NASCAR Heat 5, NASCAR Heat Ultimate Edition, and NASCAR 21: Ignition, which are racing video games; KartKraft, a kart racing simulator; NASCAR Rivals, a racing video game; and Le Mans Ultimate, a official game of the FIA World Endurance Championship and 24 Hours of Le Mans. 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 offers its products for game consoles, personal computer, and mobile platforms through various retail and digital channels, including full-game and downloadable content. The company was founded in 2018 and is headquartered in Miami, Florida. Motorsport Games Inc. operates as a subsidiary of Motorsport Network LLC.

About TKO Group

TKO Group Holdings, Inc. operates as a sports and entertainment company. The company produces and licenses live events, television programs, and long-form and short-form content, reality series, and other filmed entertainment on digital and linear channels and via pay-per-view. It is involved in the merchandising of video games, apparel, equipment, trading cards, memorabilia, digital goods, and toys, as well as sale of travel packages and tickets. In addition, the company engages in the corporate sponsorships and advertising business, which offers sale of in-venue and in-broadcast advertising assets, content product integration, and digital impressions. The company was incorporated in 2023 and is based in New York, New York. TKO Group Holdings, Inc. is a subsidiary of Endeavor Group Holdings, Inc.