There's been a major selloff in Forge Global Holdings, Inc. (NYSE:FRGE) shares in the week since it released its yearly report, with the stock down 35% to US$0.65. It was a moderately negative result overall - revenue fell 2.5% short of analyst estimates at US$79m, although at least statutory losses were marginally smaller than expected, at US$0.36 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Check out our latest analysis for Forge Global Holdings
Taking into account the latest results, the current consensus from Forge Global Holdings' five analysts is for revenues of US$96.7m in 2025. This would reflect a sizeable 22% increase on its revenue over the past 12 months. Losses are predicted to fall substantially, shrinking 24% to US$0.27. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$109.6m and losses of US$0.22 per share in 2025. There's been a definite change in sentiment in this update, with the analysts administering a notable cut to next year's revenue estimates, while at the same time increasing their loss per share forecasts.
The consensus price target fell 17% to US$3.05, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Forge Global Holdings analyst has a price target of US$5.00 per share, while the most pessimistic values it at US$2.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
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. It's clear from the latest estimates that Forge Global Holdings' rate of growth is expected to accelerate meaningfully, with the forecast 22% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 1.8% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 5.9% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Forge Global Holdings is expected to grow much faster than its 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. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Forge Global Holdings' future valuation.
With that in mind, we wouldn't be too quick to come to a conclusion on Forge Global Holdings. Long-term earnings power is much more important than next year's profits. We have forecasts for Forge Global Holdings going out to 2026, and you can see them free on our platform here.
It is also worth noting that we have found 3 warning signs for Forge Global Holdings that you need to take into consideration.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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