Bullish indicating open at $55-$60, IPO prices at $37
On Thursday, UBS analyst Alex Kramm adjusted the price target for Forge Global Holdings Inc (NYSE:FRGE) to $2.00, down from the previous target of $3.00, while continuing to recommend a Buy rating for the stock. Kramm's assessment reflects a positive outlook on the company's future, despite acknowledging the uncertainty surrounding its growth trajectory. The stock, currently trading at $0.58, has shown remarkable resilience with a nearly 20% gain over the past week, according to InvestingPro data.
Kramm noted that investor interest in owning and trading private company shares is expected to increase, which bodes well for Forge Global. However, he also pointed out that the company's growth path remains unpredictable. The first quarter is anticipated to be strong, but recent market volatility, coupled with potential postponements in initial public offering (IPO) markets, could present challenges. InvestingPro data reveals the company achieved 13.62% revenue growth in the last twelve months, though it faces profitability challenges with negative earnings.
The decision to lower the price target comes with a recognition of the current market conditions and their impact on the company's performance. Kramm also mentioned that Forge Global's efforts to reduce spending and cash burn are seen as a positive move. These cost-cutting measures are important as the company navigates through a period of financial uncertainty. While the company maintains a healthy current ratio of 4.74, indicating strong short-term liquidity, InvestingPro analysis flags rapid cash burn as a key concern.
Additionally, Kramm highlighted that new initiatives by Forge Global are positioning the company to tap into additional revenue streams. These strategic steps are aimed at diversifying the company's income sources and strengthening its financial foundation.
Forge Global specializes in providing a marketplace for private company shares, offering investors a platform to buy and sell equity in companies that are not publicly traded. As market dynamics evolve, the company is adapting its strategies to ensure it remains competitive and continues to attract investor interest.
In other recent news, Forge Global Holdings Inc. reported its fourth-quarter earnings for 2024, revealing a slight miss on earnings per share (EPS) and revenue compared to analyst forecasts. The company posted an EPS of -0.08, slightly below the expected -0.07, and revenue came in at $18.3 million, falling short of the projected $25.19 million. Despite these figures, Forge Global saw a 46% year-over-year increase in marketplace revenues and a 73% surge in trading volume, indicating robust demand in private markets. Additionally, the company launched Forge Pro and expanded its SPV structures, suggesting a focus on innovation and market expansion.
Forge Global also announced a 1-for-15 reverse stock split, aimed at complying with the New York Stock Exchange's minimum bid price requirement for continued listing. The reverse stock split will consolidate every fifteen shares into one new share, with no fractional shares issued. In another development, Forge Global replaced Ernst & Young with KPMG as its independent auditor for the fiscal year ending December 31, 2025. The company confirmed there were no disagreements with Ernst & Young regarding accounting principles or practices.
Moreover, Forge Global has partnered with Yahoo Finance to provide real-time pricing and valuation data for late-stage U.S. private companies. This collaboration aims to enhance investors' ability to access and compare private company performance data. Lastly, Forge Global appointed financial industry veteran Brian McDonald to its Board of Directors, expecting his extensive background to support the company's strategic initiatives, particularly in technology-driven growth and international market expansion.
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