Analysts Have Lowered Expectations For Forge Global Holdings, Inc. (NYSE:FRGE) After Its Latest Results

Forge Global Holdings, Inc. Common Stock -6.90%

Forge Global Holdings, Inc. Common Stock

FRGE

1.35

-6.90%

Forge Global Holdings, Inc. (NYSE:FRGE) shareholders are probably feeling a little disappointed, since its shares fell 6.3% to US$1.93 in the week after its latest annual results. Forge Global Holdings reported revenues of US$70m, in line with expectations, but it unfortunately also reported (statutory) losses of US$0.52 per share, which were slightly larger than expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Forge Global Holdings

earnings-and-revenue-growth
NYSE:FRGE Earnings and Revenue Growth March 29th 2024

Taking into account the latest results, the consensus forecast from Forge Global Holdings' five analysts is for revenues of US$92.1m in 2024. This reflects a substantial 32% improvement in revenue compared to the last 12 months. Losses are expected to be contained, narrowing 20% from last year to US$0.40. Before this latest report, the consensus had been expecting revenues of US$98.1m and US$0.37 per share in losses. While this year's revenue estimates dropped there was also a notable increase in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.

There was no major change to the consensus price target of US$3.88, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Forge Global Holdings analyst has a price target of US$7.00 per share, while the most pessimistic values it at US$2.00. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Forge Global Holdings' past performance and to peers in the same industry. One thing stands out from these estimates, which is that Forge Global Holdings is forecast to grow faster in the future than it has in the past, with revenues expected to display 32% annualised growth until the end of 2024. If achieved, this would be a much better result than the 13% annual decline over the past three years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 6.8% annually. Not only are Forge Global Holdings' revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. They also downgraded Forge Global Holdings' revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Forge Global Holdings analysts - going out to 2026, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 3 warning signs for Forge Global Holdings that you need to be mindful of.

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