Contrasting Motorsport Games (NASDAQ:MSGM) & Electronic Arts (NASDAQ:EA)

Electronic Arts (NASDAQ:EA) and Motorsport Games (NASDAQ:MSGM) are both consumer discretionary companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, earnings, valuation, analyst recommendations, dividends, risk and institutional ownership.

Volatility & Risk

Electronic Arts has a beta of 0.74, meaning that its share price is 26% less volatile than the S&P 500. Comparatively, Motorsport Games has a beta of 1.76, meaning that its share price is 76% more volatile than the S&P 500.

Institutional and Insider Ownership

90.2% of Electronic Arts shares are owned by institutional investors. Comparatively, 1.7% of Motorsport Games shares are owned by institutional investors. 0.2% of Electronic Arts shares are owned by insiders. Comparatively, 17.3% of Motorsport Games shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Electronic Arts and Motorsport Games’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Electronic Arts	9.31%	23.53%	11.78%
Motorsport Games	34.24%	86.01%	42.20%

Earnings and Valuation

This table compares Electronic Arts and Motorsport Games”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Electronic Arts	$7.46 billion	6.64	$1.12 billion	$2.66	74.41
Motorsport Games	$9.42 million	2.20	-$2.75 million	$0.40	8.98

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

Analyst Recommendations

This is a breakdown of current ratings and target prices for Electronic Arts and Motorsport Games, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Electronic Arts	1	20	4	0	2.12
Motorsport Games	0	1	0	0	2.00

Electronic Arts presently has a consensus target price of $186.95, indicating a potential downside of 5.55%. Given Electronic Arts’ stronger consensus rating and higher possible upside, equities analysts clearly believe Electronic Arts is more favorable than Motorsport Games.

Summary

Electronic Arts beats Motorsport Games on 9 of the 14 factors compared between the two stocks.

About Electronic Arts

Electronic Arts Inc. develops, markets, publishes, and distributes games, content, and services for game consoles, PCs, mobile phones, and tablets worldwide. It develops and publishes games and services across various genres, such as sports, racing, first-person shooter, action, role-playing, and simulation primarily under the Battlefield, The Sims, Apex Legends, Need for Speed, and license games from others, including FIFA, Madden NFL, UFC, and Star Wars brands. The company licenses its games to third parties to distribute and host its games. It markets and sells its games and services through digital distribution and retail channels, as well as directly to mass market retailers, specialty stores, and distribution arrangements. Electronic Arts Inc. was incorporated in 1982 and is headquartered in Redwood City, California.

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.