Mixed Results. The company’s Q3 2021 revenue of $2.1 million topped our estimate of $1.4 million by 52.7%. Adj. EBITDA, however, fell short of our estimates, coming in at a loss of $5.45 million, 9% lower than the $5 million loss we had forecasted. The adj. EBITDA miss is largely attributable to developmental costs in the quarter.Maintaining revenue estimates. We believe the company is positioned to meet our 2021 full year revenue guidance on the back of its Q4 launch of NASCAR21: Ignition. Looking ahead, management reiterated the company’s goal to release a new INDYCAR game in 2023. As such, we are maintaining our 2022 and 2023 revenue estimates of $29.7 million and $41.1 million, respectively. The company is expected to have an adj. EBITDA loss of $11 million in 2022j, but should swing cash flow positive in 2023.Throttling to the finish line. We anticipate Q4 revenue of $14.2 million, 382% higher than in the previous year’s Q4. The expected uptick in revenue is due primarily to the October 28 launch of NASCAR21: Ignition. According to management, the expected revenue from pre-orders of Ignition is 18% higher than the revenue associated with pre-orders of its predecessor, NASCAR Heat 5. Foundation for the future. NASCAR21: Ignition is the company’s first “built from the ground up” NASCAR title, which is a key step for its developmental capabilities. We believe that the new technology embedded in the game will be the platform for future game launches. Notably, we believe that the company now has the foundation to support a favorable revenue trajectory as new games are launched. Reiterating outperform rating. Near current levels, shares of MSGM trade at 3.4 times EV to our 2022 revenue estimate. We are reiterating our outperform rating of the shares with a price target of $20, which is reflective of a target EV to 2022 Revenue multiple of 5.4x. Read More >>