Financial Review: DoubleDown Interactive (NASDAQ:DDI) and Motorsport Games (NASDAQ:MSGM)

Motorsport Games (NASDAQ:MSGM) and DoubleDown Interactive (NASDAQ:DDI) are both small-cap consumer discretionary companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, earnings, valuation, dividends, risk, profitability and institutional ownership.

Risk & Volatility

Motorsport Games has a beta of 1.77, suggesting that its stock price is 77% more volatile than the S&P 500. Comparatively, DoubleDown Interactive has a beta of 0.84, suggesting that its stock price is 16% less volatile than the S&P 500.

Valuation & Earnings

This table compares Motorsport Games and DoubleDown Interactive”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Motorsport Games	$8.69 million	2.08	-$2.75 million	$0.40	7.83
DoubleDown Interactive	$341.33 million	1.23	$124.11 million	$2.30	3.68

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Motorsport Games	34.24%	86.01%	42.20%
DoubleDown Interactive	32.94%	12.92%	11.89%

Analyst Recommendations

This is a summary of recent recommendations and price targets for Motorsport Games and DoubleDown Interactive, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Motorsport Games	0	1	0	0	2.00
DoubleDown Interactive	0	2	4	0	2.67

DoubleDown Interactive has a consensus price target of $18.60, indicating a potential upside of 119.86%. Given DoubleDown Interactive’s stronger consensus rating and higher possible upside, analysts plainly believe DoubleDown Interactive is more favorable than Motorsport Games.

Institutional and Insider Ownership

1.7% of Motorsport Games shares are owned by institutional investors. 17.3% of Motorsport Games shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

Motorsport Games beats DoubleDown Interactive on 8 of the 14 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 DoubleDown Interactive

DoubleDown Interactive Co., Ltd. engages in the development and publishing of casual games and mobile applications in South Korea. It publishes digital gaming content on mobile and web platforms. The company offers DoubleDown Casino, DoubleDown Classic, DoubleDown Fort Knox, and cash me out games, as well as sells in-game virtual chips. Its games are primarily distributed, marketed, and promoted through third party platform providers. The company was formerly known as The8Games Co., Ltd. and changed its name to DoubleDown Interactive Co., Ltd. in December 2019. The company was incorporated in 2008 and is headquartered in Seoul, South Korea. DoubleDown Interactive Co., Ltd. is a subsidiary of DoubleU Games Co., Ltd.