Initiating coverage with an Outperform rating. We view the MSGM shares as an attractive content play in the gaming industry, with a company that has the prospect to have a leading position in the racing video game genre. The racing genre is among the largest in the gaming industry and the company has long term, exclusive rights to recognizable, motor sports brands such as NASCAR, BTCC, Indycar, and LeMans racing. Fast growing industry. It is projected that there are 2.7 billion video gamers worldwide that spent $174.9 billion on video games in 2020, a number that is expected to increase above $200 billion by 2023. Racing games, in particular, rank among the top 10 genres and are among the most engaged by gamers.Attractive revenue outlook. The company is expected to jump start its favorable revenue trajectory with the launch of NASCAR 21: Ignition, a relaunch of its NASCAR series. The game, which is available for pre-sale, will be launched on October 28th. We estimate revenues to grow 46% in 2022 and 39% in 2023, which could be viewed as conservative. With a platform of four games in 2023, we believe that the company will swing toward cash flow positive.Financially capable. The company as of June 30th had $28.3 million in cash and virtually no debt, providing substantial financial flexibility to fund its game development through 2022. Furthermore, we believe that the company continues to eye acquisition opportunities in the racing genre to solidify its solid position in the racing game market.Price target $20. Near current levels, the MSGM shares trade at a 4.8 times Enterprise Value to our fiscal year 2022 revenue estimate of $29.6 million. Our $20 price target anticipates a target multiple of 5.4 times EV to Revenue, which is supported by current transaction prices in the industry at 7.5 times revenue. Read More >>