Secular Trends And Fintech Integration Will Revolutionize Private Market Platforms

Key Takeaways

• Scalable technology and network effects position Forge for significant margin gains, recurring revenues, and accelerated user and transaction growth beyond analyst expectations.
  
• Regulatory changes and product innovations uniquely position Forge to capture new investor segments, unlock high-margin revenue, and sustain above-average growth as private markets expand.
  
• Cautious tech adoption, heavy reliance on transaction revenue, shrinking inventory, rising costs, and intensifying competition threaten growth, margins, and long-term profitability.

Catalysts

Operates a financial services platform in California.

• While analysts broadly agree Forge's next-generation technology platform and automation will drive marketplace efficiency and revenue, they are underestimating the magnitude of scalable profit expansion; as the marketplace gains institutional and retail adoption, transaction costs will drop sharply, leading to substantial margin accretion and operating leverage that could deliver industry-leading earnings growth rates.
  
• Analyst consensus expects participation gains from retail and institutional investors, but they do not fully appreciate the compounding network effects from Forge's integrated trading, data, custody, and wealth products; as Forge becomes the central infrastructure layer for all private market stakeholders, this will accelerate user growth, boost transaction volumes, and generate durable sources of recurring revenue far exceeding current projections.
  
• Regulatory momentum and bipartisan policy tailwinds-such as open access for retirement accounts and the expansion of accredited investor definitions-are approaching a historic inflection point; Forge is uniquely positioned to capitalize first and at scale, opening massive new customer segments, rapidly growing its addressable market, and driving step-change increases in revenue and net income.
  
• The imminent launch of Forge's registered investment funds democratizing access-especially for non-accredited and 401(k) investors-will unlock entirely new, high-margin revenue streams, accelerate AUM growth, and catalyze a virtuous cycle of product cross-sell and upsell, lifting fee-based and recurring income.
  
• The persistent trend of companies staying private longer is fueling a multi-year surge in secondary transactions, as demand for liquidity by founders, employees, and investors intensifies; Forge's leadership in this space positions it for structurally higher trading volumes and fee capture, supporting sustained double-digit revenue and profit expansion well beyond industry averages.

Forge Global Holdings Future Earnings and Revenue Growth

Assumptions

• This narrative explores a more optimistic perspective on Forge Global Holdings compared to the consensus, based on a Fair Value that aligns with the bullish cohort of analysts.
• The bullish analysts are assuming Forge Global Holdings's revenue will grow by 20.2% annually over the next 3 years.
• Even the bullish analysts are not forecasting that Forge Global Holdings will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate Forge Global Holdings's profit margin will increase from -69.1% to the average US Capital Markets industry of 25.9% in 3 years.
• If Forge Global Holdings's profit margin were to converge on the industry average, you could expect earnings to reach $40.8 million (and earnings per share of $2.55) by about August 2028, up from $-62.7 million today. The analysts are largely in agreement about this estimate.
• In order for the above numbers to justify the price target of the more bullish analyst cohort, the company would need to trade at a PE ratio of 29.6x on those 2028 earnings, up from -4.7x today. This future PE is greater than the current PE for the US Capital Markets industry at 26.6x.
• Analysts expect the number of shares outstanding to grow by 7.0% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 7.97%, as per the Simply Wall St company report.

Forge Global Holdings Future Earnings Per Share Growth

Risks

• The move toward tokenization, blockchain, and direct-to-market fundraising was discussed as an emerging trend among competitors and industry participants, and Forge's current cautious approach to adopting these technologies could cause it to lose relevance and miss transaction volume growth if alternative platforms draw liquidity and engagement, ultimately placing downward pressure on revenue growth.
  
• Forge's revenue mix remains heavily tied to transaction-based income rather than recurring streams, and with macro uncertainty and seasonality acknowledged as challenging factors, any downturn in private company trading activity, fewer large block trades, or tightening monetary conditions could directly impair top-line revenue and delay the path to positive earnings.
  
• The ongoing push for earlier public listings and increased transparency in private markets may reduce the pool of high-quality, late-stage private companies available for secondary trading, shrinking Forge's core inventory and limiting growth in trading volume, which would dampen future revenue generation and margin expansion.
  
• While Forge touts operational scalability and cost controls, its continued sizable investments in technology, acquisitions, and global scaling-without explicit evidence of sustained proportionate increases in transaction volume-raises the risk of persistently high operating costs, potentially resulting in structurally lower net margins and further delays to breakeven profitability.
  
• A growing competitive field of established financial institutions and fast-moving fintechs, many of whom have greater distribution capabilities or offer similar fund access and custody products, could compress fees, erode Forge's differentiation, and reduce its ability to command premium pricing, thereby hindering revenue growth and long-term earnings power.

Valuation

• The assumed bullish price target for Forge Global Holdings is $60.0, which is the highest price target estimate amongst analysts. This valuation is based on what can be assumed as the expectations of Forge Global Holdings's future earnings growth, profit margins and other risk factors from analysts on the bullish end of the spectrum.
  
• However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $60.0, and the most bearish reporting a price target of just $18.0.
  
• In order for you to agree with the bullish analysts, you'd need to believe that by 2028, revenues will be $157.7 million, earnings will come to $40.8 million, and it would be trading on a PE ratio of 29.6x, assuming you use a discount rate of 8.0%.
  
• Given the current share price of $21.84, the bullish analyst price target of $60.0 is 63.6% higher.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.