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.

After the downgrade, the six analysts covering Forge Global Holdings are now predicting revenues of US$110m in 2025. If met, this would reflect a substantial 37% improvement in sales compared to the last 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 47% to US$0.22. However, before this estimates update, the consensus had been expecting revenues of US$125m and US$0.20 per share in losses. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also expecting losses per share to increase.

See 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Forge Global Holdings' past performance and to peers in the same industry. 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. Factoring in the forecast acceleration in revenue, it's pretty clear that Forge Global Holdings is expected to grow much faster than its 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. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to 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. At Simply Wall St, we have a full range of analyst estimates for Forge Global Holdings 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.