Tuesday, JPMorgan analysts downgraded Forge Global Holdings Inc (NYSE:FRGE) stock rating from Neutral to Underweight, citing a lack of near-term catalysts and continued pressure on volumes that could delay the company’s path to profitability.
The company, currently trading at $0.87 with a market capitalization of $161 million, operates a technology-enabled platform that facilitates the buying and selling of private company shares by accredited retail and institutional participants, as well as issuers. According to InvestingPro analysis, the stock appears undervalued at current levels.
Despite recognizing Forge’s strong position to take advantage of growing private-market assets under management (AUM) and an increasing number of large private companies in the medium term, JPMorgan raised concerns about the immediate future. The firm highlighted that while many expect a recovery in capital markets activity in 2025, the anticipated increase in Forge’s transaction volumes might not materialize as expected.
InvestingPro data reveals the company is quickly burning through cash, with multiple analysts revising their earnings downward for the upcoming period. Get access to 11 more exclusive ProTips and comprehensive analysis with an InvestingPro subscription.
JPMorgan’s analysis pointed to the efficiency of Forge’s transaction process for its network of accredited participants, which includes both retail and institutional investors, along with issuers. The firm’s tech-enabled platform has been a cornerstone in establishing a suite of solutions that streamline the transaction process in the private marketplace. Despite operational challenges, the company maintains strong liquidity with a current ratio of 5.37, indicating sufficient assets to cover short-term obligations.
However, the near-term outlook for Forge remains challenging according to JPMorgan. The analysts believe that while the overall recovery in capital markets is on the horizon, Forge might not see a corresponding rise in volumes in the near term. This could potentially suspend the company’s trajectory towards achieving profitability.
“In other recent news, Forge Global Holdings Inc. reported its financial results for the third quarter of fiscal 2024. The company’s CEO, Kelly Rodriques, and CFO, Mark Lee, led an earnings call to discuss the performance and provide insights into future expectations. Despite the absence of specific bullish or bearish highlights, the call offered a comprehensive understanding of Forge’s financial health.
The company also made forward-looking statements reflecting current expectations about future events and financial performance. Although the summary did not disclose any misses in Forge’s third quarter financial performance, the call included a Q&A session providing further clarification.
While no specific details were mentioned, the call was webcast live and is available for replay for 30 days on Forge’s Investor Relations website. Interested investors and analysts can review the investor presentation to gain a deeper understanding of Forge’s financials and future outlook. These developments are part of the company’s recent activities, offering stakeholders valuable insights into its operations and performance.”
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
