Analysts Have Just Cut Their Forge Global Holdings, Inc. (NYSE:FRGE) Revenue Estimates By 12%

Today is shaping up negative for Forge Global Holdings, Inc. (NYSE:FRGE) shareholders, with the analysts delivering a substantial negative revision to next year's forecasts. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

Following the downgrade, the most recent consensus for Forge Global Holdings from its six analysts is for revenues of US$110m in 2025 which, if met, would be a substantial 37% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 47% to US$0.22 per share. However, before this estimates update, the consensus had been expecting revenues of US$125m and US$0.20 per share in losses. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to next year's revenue estimates, while at the same time increasing their loss per share forecasts.

Check out our latest analysis for Forge Global Holdings

The consensus price target fell 5.2% to US$3.68, implicitly signalling that lower earnings per share are a leading indicator for Forge Global Holdings' valuation.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Forge Global Holdings' rate of growth is expected to accelerate meaningfully, with the forecast 29% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 2.1% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 5.7% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Forge Global Holdings to grow faster than the wider industry.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses next year, suggesting all may not be well at Forge Global Holdings. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of Forge Global Holdings' future valuation. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Forge Global Holdings after today.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Forge Global Holdings analysts - going out to 2026, and you can see them free on our platform here.

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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.