The past year for Forge Global Holdings (NYSE:FRGE) investors has not been profitable
It is a pleasure to report that the Forge Global Holdings, Inc. (NYSE:FRGE) is up 101% in the last quarter. But that doesn't change the fact that the returns over the last year have been disappointing. Specifically, the stock price slipped by 51% in that time. It's not that amazing to see a bounce after a drop like that. You could argue that the sell-off was too severe.
So let's have a look and see if the longer term performance of the company has been in line with the underlying business' progress.
View our latest analysis for Forge Global Holdings
Forge Global Holdings isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
Forge Global Holdings' revenue didn't grow at all in the last year. In fact, it fell 44%. That's not what investors generally want to see. In the absence of profits, it's not unreasonable that the share price fell 51%. Having said that, if growth is coming in the future, the stock may have better days ahead. We don't generally like to own companies with falling revenues and no profits, so we're pretty cautious of this one, at the moment.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
We consider it positive that insiders have made significant purchases in the last year. Even so, future earnings will be far more important to whether current shareholders make money. This free report showing analyst forecasts should help you form a view on Forge Global Holdings
A Different Perspective
While Forge Global Holdings shareholders are down 51% for the year, the market itself is up 15%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Putting aside the last twelve months, it's good to see the share price has rebounded by 101%, in the last ninety days. Let's just hope this isn't the widely-feared 'dead cat bounce' (which would indicate further declines to come). I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Take risks, for example - Forge Global Holdings has 3 warning signs we think you should be aware of.
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.
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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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