Forge Global Holdings, Inc. (FRGE) Stock Analysis and Metrics

Sector: Financial Services Industry: Capital Markets CIK: 0001827821

Market Cap 574.11 Mn

P/B 2.83

P/E -9.17

P/S 6.18

ROIC (Qtr) -29.63

Div Yield % 0.00

Rev 1y % (Qtr) 10.64

Total Debt (Qtr) 13.98 Mn

Debt/Equity (Qtr) 0.07

About

Forge Global Holdings, Inc., known by its ticker symbol FRGE, operates in the financial services industry, specifically in the private market sector. The company is building a more accessible, transparent, and liquid market for participating in private market growth. Forge offers a trusted trading platform, proprietary data, and insights to inform investment strategies, along with custody services to help companies, stockholders, institutions, and accredited investors navigate and transact in the private market. Forge's main business activities...

Forge Global Holdings, Inc., known by its ticker symbol FRGE, operates in the financial services industry, specifically in the private market sector. The company is building a more accessible, transparent, and liquid market for participating in private market growth. Forge offers a trusted trading platform, proprietary data, and insights to inform investment strategies, along with custody services to help companies, stockholders, institutions, and accredited investors navigate and transact in the private market.

Forge's main business activities revolve around providing a comprehensive platform for private market participants. The company offers three primary products and services: Trading Solutions, Custody Solutions, and Data Solutions. Trading Solutions enable accredited investors to connect with private company stockholders and facilitate private share transactions. Custody Solutions provide a secure and user-friendly online portal for investors to hold, value, and manage assets. Data Solutions aggregate, verify, anonymize, and supplement private market data, offering insights and analytics for investors to research and analyze investment opportunities.

Forge's position within the industry is strengthened by its focus on the private market, proprietary technology and operating expertise, and strategy powered by complementary and integrated solutions. The company's leadership team is deep and experienced, with senior executives from innovative technology companies, top-tier financial firms, leading public market exchanges, and globally recognized asset managers. Forge's competitive advantage lies in its unified and complementary solutions, strategic and commercial partners, and existing scale.

Forge's customers include companies, employee and investor stockholders, institutional investors, and sophisticated accredited investors. The company's marketing strategy aims to build its brand, attract and retain customers, and deliver compelling content and experiences that facilitate private market participation. Forge's goal is to amplify its position as the experts in the private markets and develop customer experiences that reinforce this position.

Forge's product and service brand names include its Trading Solutions, Custody Solutions, and Data Solutions. These solutions are purpose-built for the needs of private market participants, and the company's robust technology platform, combined with its large network of customers, partners, and other market participants, provide a strong barrier to entry.

Price action

Investment thesis

Bull case

Healthy cash reserves of 33.44M provide 22.13x coverage of short-term debt 1.51M, demonstrating strong liquidity position and minimal refinancing risk.
Operating cash flow of (39.86M) provides exceptional 205.46x coverage of minority interest expenses (194000), showing strong core operations.
Strong tangible asset base of 92.71M provides 6.63x coverage of total debt 13.98M, indicating robust asset backing and low credit risk.
Strong free cash flow of (40.30M) provides 4.38x coverage of acquisition spending (9.21M), indicating disciplined M&A strategy.
Long-term investments of 9.44M provide solid 0.76x coverage of long-term debt 12.46M, indicating strategic financial planning.

Bear case

Cash reserves of 33.44M provide limited coverage of acquisition spending of (9.21M), which is -3.63x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
The company's operating cash flow of (39.86M) shows concerning coverage of stock compensation expenses of 20.51M, with a -1.94 ratio indicating potential earnings quality issues.
Free cash flow of (40.30M) provides weak coverage of capital expenditures of 446000, with a -90.37 ratio suggesting additional external financing needs for growth initiatives.
Operating cash flow of (39.86M) provides minimal -196.35x coverage of tax expenses of 203000, suggesting potential tax planning inefficiencies or unsustainable tax positions.
Operating earnings of (62.41M) show weak coverage of depreciation charges of 6.12M, with a -10.21 ratio indicating high capital intensity and potential reinvestment needs.

Peer comparison

Companies in the Capital Markets

S.No.	Ticker	Company	Market Cap	P/E	P/S	Total Debt (Qtr)
1	GS	Goldman Sachs Group Inc	284.23 Bn	17.94	4.84	911.32 Bn
2	MS	Morgan Stanley	279.63 Bn	17.97	4.05	353.12 Bn
3	SCHW	Schwab Charles Corp	179.33 Bn	23.09	7.83	27.59 Bn
4	HOOD	Robinhood Markets, Inc.	106.92 Bn	48.73	25.43	0.00 Bn
5	CRCL	Circle Internet Group, Inc.	40.97 Bn	261.00	24.22	0.15 Bn
6	IBKR	Interactive Brokers Group, Inc.	28.23 Bn	30.79	4.75	28.43 Bn
7	LPLA	LPL Financial Holdings Inc.	27.60 Bn	33.13	1.77	7.52 Bn
8	FUTU	Futu Holdings Ltd	22.89 Bn	18.13	8.54	1.75 Bn

Industry comparisons

Current Valuation	Value	Ind Avg
EV to Assets EV to Assets	2.12	1.07
EV to Cash from Ops. EV/CFO	-13.39	15.33
EV to Debt EV to Debt	38.17	21.89
EV to EBIT EV/EBIT	-8.55	-0.80
EV to EBITDA EV/EBITDA	-8.55	11.20
EV to Free Cash Flow [EV/FCF] EV/FCF	-13.24	43.08
EV to Market Cap EV to Market Cap	0.93	-0.05
EV to Revenue EV/Rev	5.74	12.82
Price to Book Value [P/B] P/B	2.83	3.09
Price to Earnings [P/E] P/E	-9.17	6.20

Dividend Metrics	Value	Ind Avg	Percentile
Dividend Coverage Ratio Dividend Coverage Ratio	0.00	4.22
Dividend Payout Ratio % Div Payout % (Qtr)	0.00	10.37
Dividend per Basic Share Div per Share (Qtr)	0.00	0.70
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr)	0.00	-8.68
Interest Coverage Int. cover (Qtr)	0.00	37.53

Growth Metrics	Value	Ind Avg
Capex Growth (1y) % Capex 1y % (Qtr)	64.43	-12,429.64
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr)	-71.06	1,588.78
Dividend Growth (1y) % Dividend Growth (1y) %	0.00	4.88
EBIAT Growth (1y) % EBIAT 1y % (Qtr)	18.13	270.93
EBITDA Growth (1y) % EBITDA 1y % (Qtr)	20.08	333.57
EBIT Growth (1y) % EBIT 1y % (Qtr)	17.51	3,103.22
EBT Growth (1y) % EBT 1y % (Qtr)	17.51	3,039.53
EPS Growth (1y) % EPS 1y % (Qtr)	24.73	24.25
FCF Growth (1y) % FCF 1y % (Qtr)	0.38	-80.08
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr)	15.99	51.33

Liquidity Ratios	Value	Ind Avg
Asset Utilization Ratio Asset Util Ratio (Qtr)	0.37	0.42
Cash Payout Ratio Cash Payout (Qtr)	0.00	-0.08
Cash Ratio Cash Ratio (Qtr)	1.09	2.01
Current Ratio Curr Ratio (Qtr)	2.55	3.47
Debt to Equity Ratio Debt/Equity (Qtr)	0.07	1.46
Interest Cover Ratio Int Coverage (Qtr)	0.00	37.53
Times Interest Earned Times Interest Earned (Qtr)	0.00	37.53

Profitability	Value	Ind Avg
EBITDA Margin % EBITDA Margin % (Qtr)	-60.60	76.68
EBIT Margin % EBIT Margin % (Qtr)	-67.20	46.81
EBT Margin % EBT Margin % (Qtr)	-67.20	58.57
Gross Margin % Gross Margin % (Qtr)	99.00	53.60
Net Profit Margin % Net Margin % (Qtr)	-67.40	29.41

Forge Global Holdings, Inc. (NYSE: FRGE)

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Price action

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Bull case

Bear case

Peer comparison

Industry comparisons

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