Analysts Have Lowered Expectations For Forge Global Holdings, Inc. (NYSE:FRGE) After Its Latest Results
Last week, you might have seen that Forge Global Holdings, Inc. (NYSE:FRGE) released its full-year result to the market. The early response was not positive, with shares down 6.3% to US$1.93 in the past week. 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. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Check out our latest analysis for Forge Global Holdings
After the latest results, the five analysts covering Forge Global Holdings are now predicting revenues of US$92.1m in 2024. If met, this would reflect a huge 32% improvement in revenue compared to the last 12 months. Losses are supposed to decline, shrinking 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 noticeable increase in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.
The average price target was broadly unchanged at US$3.88, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. 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. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. For example, we noticed that Forge Global Holdings' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 32% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 13% a year over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 6.8% per year. 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 note is the forecast of increased losses next year, suggesting all may not be well at Forge Global Holdings. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will 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.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Forge Global Holdings going out to 2026, and you can see them free on our platform here..
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 3 warning signs with Forge Global Holdings , and understanding them should be part of your investment process.
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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.
