William Blair initiated research coverage of Forge Global Holdings, Inc. (FRGE $3.27), a leading financial technology company that provides critical infrastructure, data services, and technology solutions to transact in the private markets.

Analysts Robert Napoli and Jeff Schmitt estimate that the company could generate revenue of $73.9 million in 2022, $108.5 million in 2023, and $130.5 million in 2024. They believe that Forge can sustain organic revenue growth of 20%-25% over the longer term, with potential EBITDA margins of 30%-plus once scaled.

“Forge is an emerging growth franchise that is uniquely positioned to scale in the high-growth private market economy,” Napoli said. “Forge’s global digital platform provides the most comprehensive end-to-end solutions in the marketplace. We believe that having the broadest capabilities creates a competitive advantage that drives strong network effects. Broader solutions attract more buyers and sellers, which makes the platform more attractive through enhanced liquidity, price discovery, and data capabilities. This should result in higher volumes over time and support strong long-term growth prospects.”

Schmitt said, “Forge is still earlier stage and has a long runway. We estimate Forge’s TAM is $6 billion today and should grow to $13 billion by 2026. Private market industry tailwinds include companies remaining private for longer, an accelerating number of unicorns and sub-unicorns, the attractive returns of late-stage investing, and increasing trading velocity as investors look for greater private market exposure. Forge’s market share is only 2% today. In addition to industry tailwinds, growth avenues include expanding products and capabilities, adding partnerships, growing internationally, and executing on strategic M&A activity.”

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