Forge Global (NYSE:FRGE – Get Free Report) and Houlihan Lokey (NYSE:HLI – Get Free Report) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, valuation, institutional ownership, risk, profitability, analyst recommendations and dividends.
Risk & Volatility
Forge Global has a beta of 2.17, indicating that its stock price is 117% more volatile than the S&P 500. Comparatively, Houlihan Lokey has a beta of 0.95, indicating that its stock price is 5% less volatile than the S&P 500.
Earnings & Valuation
This table compares Forge Global and Houlihan Lokey”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Forge Global | $79.33 million | 7.66 | -$66.33 million | ($5.20) | -8.60 |
| Houlihan Lokey | $2.39 billion | 5.23 | $399.71 million | $6.20 | 28.79 |
Houlihan Lokey has higher revenue and earnings than Forge Global. Forge Global is trading at a lower price-to-earnings ratio than Houlihan Lokey, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Forge Global and Houlihan Lokey’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Forge Global | -71.87% | -29.06% | -24.63% |
| Houlihan Lokey | 16.62% | 24.17% | 14.37% |
Analyst Recommendations
This is a summary of current ratings and target prices for Forge Global and Houlihan Lokey, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Forge Global | 1 | 5 | 1 | 0 | 2.00 |
| Houlihan Lokey | 0 | 5 | 4 | 1 | 2.60 |
Forge Global presently has a consensus target price of $42.00, suggesting a potential downside of 6.05%. Houlihan Lokey has a consensus target price of $207.43, suggesting a potential upside of 16.21%. Given Houlihan Lokey’s stronger consensus rating and higher possible upside, analysts clearly believe Houlihan Lokey is more favorable than Forge Global.
Institutional & Insider Ownership
40.7% of Forge Global shares are held by institutional investors. Comparatively, 78.1% of Houlihan Lokey shares are held by institutional investors. 4.5% of Forge Global shares are held by insiders. Comparatively, 22.8% of Houlihan Lokey shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Summary
Houlihan Lokey beats Forge Global on 13 of the 15 factors compared between the two stocks.
About Forge Global
Forge Global Holdings, Inc. operates a financial services platform in California. The company's platform solutions include trading solutions, a platform that connects investors with private company stockholders and enables them to facilitate private share transactions; and custody solutions, a non-depository trust company that enables clients to securely custody and manage assets through an online portal. It also provides data solutions, such as information and insight to navigate, analyze, and make investment decisions to market participants in the private market. The company was founded in 2014 and is headquartered in San Francisco, California.
About Houlihan Lokey
Houlihan Lokey, Inc., an investment banking company, provides merger and acquisition (M&A), capital market, financial restructuring, and financial and valuation advisory services worldwide. It operates in three segments: Corporate Finance, Financial Restructuring, and Financial and Valuation Advisory. The Corporate Finance segment offers general financial advisory services; and advises public and private institutions on buy-side and sell-side transactions, leveraged loans, private mezzanine debt, high-yield debt, initial public offerings, follow-ons, convertibles, equity private placements, private equity, and liability management transactions, as well as advise financial sponsors on various transactions. The Financial Restructuring segment advises debtors, creditors, and other parties-in-interest related to recapitalization/deleveraging transactions. It also provides a range of advisory services, including structuring, negotiation, and confirmation of plans of reorganization; structuring and analysis of exchange offers; corporate viability assessment; dispute resolution and expert testimony; and procuring debtor-in-possession financing. The Financial and Valuation Advisory segment offers valuations of various assets, such as companies, illiquid debt and equity securities, and intellectual property. It also provides fairness opinions in connection with M&A and other transactions, solvency opinions in connection with corporate spin-offs and dividend recapitalizations, and other types of financial opinions. In addition, this segment offers dispute resolution services. It serves corporations, financial sponsors, and government agencies. The company was incorporated in 1972 and is headquartered in Los Angeles, California.
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