Financial Analysis: Motorsport Games (NASDAQ:MSGM) and TKO Group (NYSE:TKO)

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

Volatility and Risk

TKO Group has a beta of 0.67, suggesting that its share price is 33% less volatile than the S&P 500. Comparatively, Motorsport Games has a beta of 1.87, suggesting that its share price is 87% more volatile than the S&P 500.

Valuation & Earnings

This table compares TKO Group and Motorsport Games”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TKO Group	$4.74 billion	7.03	$195.40 million	$2.85	61.68
Motorsport Games	$11.30 million	1.79	$6.93 million	$0.43	11.30

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.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for TKO Group and Motorsport Games, as provided by MarketBeat.com.

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

TKO Group currently has a consensus target price of $237.50, indicating a potential upside of 35.11%. Given TKO Group’s higher probable upside, analysts clearly believe TKO Group is more favorable than Motorsport Games.

Institutional and Insider Ownership

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

Profitability

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

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

Summary

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

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.

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.