Forge Global Holdings, Inc. provides marketplace infrastructure, data services, and technology solutions for private market participants. It enables private company shareholders to trade private company shares with accredited investors. The company was founded in 2014 and is based in San Francisco, California.

Forge Global Holdings, Inc.

Technology

The company does not pay dividends at all, or it pays them sporadically. There have only been a few years with dividend payments in the past ten years. 

FRGE reported revenue of USD 85mn in the last 12 months, up 8% from FY24. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS grew 78% from FY24 to USD -2.72. Market expects EPS to reach USD -5.54 in FY25.

Over the past six months, the stock has consistently climbed, resulting in 1264% total increase. When compared to its international counterparts in the same sector and industry (as shown above), the stock has exceeded their performances, leading by 1265ppts in total. This is equally valid for peers from the same country and industry. Given the stock's valuation versus its peers, its total price movement is mildly favourable.

The company has reported very poor EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to -77.2% in the last 12 months, up from -119.0% in FY23. 

Historically, FRGE has reported very poor net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled -74.8%, a growth from -129.7% in FY23. 

In the last 12 months, the return on capital employed (RoCE) grew to -24.8%, below the peers. The consensus estimate for FY24 for RoCE is -25.0%, again behind the peers. 

Forge Global Holdings, Inc. reported a return on equity (RoE) of -26.8% in the last 12 months, up from -31.0% in FY23. The market consensus projects an RoE of -26.4% in FY24, again behind its peers. 

Another important profitability metric, return on assets (RoA), amounted to -22.8% in the last 12 months, an increase from -26.8% in FY23. The market analysts predict that RoA will be -22.4% in FY24, again weaker than its peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been -2.6 in the past several years. This ratio implies a fragile shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

FRGE has below average trading liquidity. The average private investor can sell his common position in the stock in a single trading day under normal market conditions. Liquidity is unstable and remains mildly favourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. The stock has a very small market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is high. Among the negative credit factors, we point to slow historical revenue growth, bleak profitability, negligible return on capital, weak debt servicing capacity, inadequate interest coverage, and poor cash flow generation. We note low margin volatility and an favourable capital structure, among the positive credit factors. 

In highly turbulent market conditions, FRGE is exceptionally volatile. In other words, the stock will be among the worst-performers in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be critical. 

In normal market circumstances, FRGE is exceptionally volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will change quite unpredictably. The stock's losses on its worst days (less than 1-5% of the time) will range from critical to immense. 

From both historical and forecast perspectives, the stock is moderately underpriced compared to similar stocks. 

Forge Global Holdings, Inc.

$ 14.6

3

Forge Global Holdings, Inc.

$ 14.6

3

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

$ 14.6

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