Analyzing Motorsport Games (NASDAQ:MSGM) & SolarWinds (NYSE:SWI)

Motorsport Games (NASDAQ:MSGM) and SolarWinds (NYSE:SWI) are both small-cap consumer discretionary companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, risk, earnings, dividends, institutional ownership, profitability and valuation.

Institutional and Insider Ownership

1.7% of Motorsport Games shares are owned by institutional investors. Comparatively, 94.0% of SolarWinds shares are owned by institutional investors. 1.1% of Motorsport Games shares are owned by company insiders. Comparatively, 2.0% of SolarWinds shares are owned by company 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.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Motorsport Games and SolarWinds, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Motorsport Games	0	0	0	0	N/A
SolarWinds	0	4	0	0	2.00

SolarWinds has a consensus price target of $13.50, suggesting a potential upside of 21.73%. Given SolarWinds’ higher possible upside, analysts plainly believe SolarWinds is more favorable than Motorsport Games.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Motorsport Games	-188.90%	-209.06%	-63.92%
SolarWinds	-1.20%	5.08%	2.23%

Volatility & Risk

Motorsport Games has a beta of 2.15, indicating that its share price is 115% more volatile than the S&P 500. Comparatively, SolarWinds has a beta of 0.97, indicating that its share price is 3% less volatile than the S&P 500.

Earnings and Valuation

This table compares Motorsport Games and SolarWinds’ top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Motorsport Games	$6.91 million	1.25	-$13.05 million	($5.28)	-0.48
SolarWinds	$758.74 million	2.46	-$9.11 million	($0.05)	-221.80

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

Summary

SolarWinds beats Motorsport Games on 10 of the 12 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 video games for game consoles, personal computer, and mobile platforms through various retail and digital channels, including full-game and downloadable content. 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. Motorsport Games Inc. was founded in 2018 and is headquartered in Miami, Florida. Motorsport Games Inc. operates as a subsidiary of Motorsport Network LLC.

About SolarWinds

SolarWinds Corporation provides information technology (IT) management software products in the United States and internationally. It provides a suite of network management software that offers real-time visibility into network utilization and bandwidth, as well as the ability to detect, diagnose, and resolve network performance problems; and a suite of infrastructure management products, which monitors and analyzes the performance of applications and their supporting infrastructure, including servers, physical, virtual and cloud infrastructure, storage, and databases. The company also provides automated network configuration, log and event management, security information and event management, access rights management, identity monitoring, server configuration monitoring and patching, and secure gateway and file transfer products; a suite of application performance management software that enables visibility into log data, cloud infrastructure metrics, applications, tracing, and digital experiences; and service management software that offers ITIL-compliant service desk solutions for various companies. In addition, it offers a suite of database performance management software that monitors, analyzes, diagnoses, and optimizes database performance and operations for the Microsoft data platform, as well as other database management system platforms; traditional, open-source, and cloud-native databases hosted on-premises, in the cloud, and hybrid models. It markets and sells its products directly to network and systems engineers, database administrators, storage administrators, DevOps, SecOps, and service desk professionals. The company was formerly known as SolarWinds Parent, Inc. and changed its name to SolarWinds Corporation in May 2018. SolarWinds Corporation was founded in 1999 and is headquartered in Austin, Texas.