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Forrester Research (FORR)
:FORR
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Forrester Research
(NASDAQ:FORR)
51Neutral
Positive Factors
Revenue Performance
Forrester Research reported Q4/24 total revenue of $108.0 million, which exceeded the forecast and the FactSet consensus forecast by 2%.
Negative Factors
Financial Outlook
Management expects the company’s Contract Value to generate flat growth in 2025, which is lower than prior expectations.
Investment Rating
The analyst maintains a MARKET PERFORM investment rating on FORR shares due to a weak 2025 financial outlook and high business risk.
Forrester Research (FORR) vs. S&P 500 (SPY)
Market Cap
$175.00M
Dividend YieldN/A
Average Volume (3M)91.19K
Price to Earnings (P/E)―
Beta (1Y)1.08
Revenue Growth-10.05%
EPS Growth-288.36%
CountryUS
Employees1,571
SectorIndustrials
Sector Strength66
IndustryConsulting Services
Share Statistics
EPS (TTM)-0.30
Shares Outstanding18,980,951
10 Day Avg. Volume73,085
30 Day Avg. Volume91,195
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.41
Price to Cash Flow (P/CF)-24.50
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$15.00Price Target Upside62.69% Upside
Rating ConsensusHold
Number of Analyst Covering2
Forrester Research Business Overview & Revenue Model
Company DescriptionForrester Research, Inc. (NASDAQ: FORR) is a leading global market research company that provides consulting and advisory services to businesses worldwide. The company specializes in offering insights and guidance on the impact of technology on business, customer experience, digital transformation, and innovation. Forrester's core offerings include proprietary research, data analytics, custom consulting, and events designed to help organizations understand market trends, consumer behavior, and technological advancements.
How the Company Makes MoneyForrester Research generates revenue primarily through its subscription-based research services, which provide clients with access to a wealth of proprietary market insights, data, and analytics. The company also earns money from consulting services, where it offers tailored advice and strategic guidance to businesses seeking to leverage Forrester's expertise in various domains. Additionally, Forrester hosts events and conferences that serve as significant revenue streams, attracting industry leaders and professionals who pay for attendance and sponsorship opportunities. Key partnerships with technology vendors and industry associations further enhance Forrester's market reach and revenue potential.
Forrester Research Financial Statement Overview
Summary
Forrester Research is facing financial challenges with declining revenues and a negative net income. The balance sheet remains stable, but cash flow issues persist, necessitating improved operational efficiency.Income Statement
Forrester Research has faced a decline in total revenue over the past year, with a revenue drop from $480.8 million in 2023 to $432.5 million in 2024. The gross profit margin remains strong at approximately 97.8%, indicating effective cost management. However, the net profit margin has turned negative due to a net income loss of $5.7 million in 2024. The company also experienced a negative revenue growth rate, highlighting challenges in maintaining revenue streams. EBIT and EBITDA margins are low at approximately 0.4%, indicating limited operational efficiency.55
Neutral
Balance Sheet
The balance sheet of Forrester Research shows a manageable debt-to-equity ratio of approximately 0.26, indicating conservative leverage. The equity ratio stands at approximately 45.6%, reflecting a balanced capital structure. Return on equity has suffered due to a net loss, impacting profitability metrics. Despite this, the company's total assets are well-supported by equity, contributing to overall stability.60
Neutral
Cash Flow
Forrester Research faced a negative operating cash flow in 2024, primarily due to operational challenges. The free cash flow has significantly declined compared to the previous year, reflecting cash management difficulties. The company has negative free cash flow growth, indicating potential issues in generating cash from operations. However, historical trends suggest the potential for recovery in cash flow positions.50
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 432.47M | 480.78M | 537.79M | 494.31M | 448.98M | Gross Profit |
| 422.82M | 276.30M | 314.01M | 292.50M | 268.08M | EBIT |
| 1.77M | 6.77M | 32.65M | 38.64M | 21.58M | EBITDA |
| 35.83M | 41.41M | 70.10M | 116.12M | 98.07M | Net Income Common Stockholders |
| -5.75M | 3.05M | 21.81M | 24.84M | 9.99M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 104.67M | 124.49M | 123.32M | 134.28M | 90.26M | Total Assets |
| 503.86M | 564.17M | 608.44M | 680.13M | 644.22M | Total Debt |
| 59.81M | 86.85M | 114.38M | 153.03M | 190.09M | Net Debt |
| 3.72M | 13.95M | -8.93M | 18.75M | 99.84M | Total Liabilities |
| 274.32M | 323.91M | 386.78M | 476.22M | 458.45M | Stockholders Equity |
| 229.54M | 240.26M | 221.66M | 203.91M | 185.77M |
| Cash Flow | Free Cash Flow | |||
| -7.26M | 16.18M | 33.76M | 96.32M | 38.85M | Operating Cash Flow |
| -3.86M | 21.67M | 39.42M | 107.07M | 47.75M | Investing Cash Flow |
| 5.02M | -36.76M | -6.81M | -29.30M | -4.57M | Financing Cash Flow |
| -16.10M | -18.30M | -38.87M | -49.14M | -23.69M |
Forrester Research Technical Analysis
Negative
9.22
Price Trends
12.05
Negative
14.06
Negative
15.75
Negative
Market Momentum
-0.78
Negative
30.54
Neutral
36.76
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FORR, the sentiment is Negative. The current price of 9.22 is below the 20-day moving average (MA) of 9.81, below the 50-day MA of 12.05, and below the 200-day MA of 15.75, indicating a bearish trend. The MACD of -0.78 indicates Negative momentum. The RSI at 30.54 is Neutral, neither overbought nor oversold. The STOCH value of 36.76 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FORR.
Forrester Research Risk Analysis
Forrester Research disclosed 19 risk factors in its most recent earnings report. Forrester Research reported the most risks in the “Ability to Sell” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Forrester Research Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $13.53B | 16.81 | 27.06% | 0.68% | 16.23% | 1403.29% | |
75 Outperform | $196.31B | 25.88 | 27.26% | 1.84% | 4.10% | 9.78% | |
75 Outperform | $31.11B | 25.26 | 122.93% | ― | 6.10% | 44.57% | |
69 Neutral | $3.97B | 67.95 | 3.19% | ― | 13.97% | -54.48% | |
62 Neutral | $8.08B | 13.63 | 3.82% | 3.13% | 3.58% | -14.35% | |
61 Neutral | $4.11B | 38.22 | 28.05% | 1.45% | 4.05% | 8.71% | |
51 Neutral | $175.00M | ― | -2.45% | ― | -10.05% | -288.36% |
* Industrials Sector Average
Performance Comparison
FORR
Forrester Research
9.22
-11.16
-54.76%
ACN
Accenture
301.46
-23.59
-7.26%
CBZ
CBIZ
73.86
-1.74
-2.30%
EXPO
Exponent
78.52
0.52
0.67%
FTI
TechnipFMC
29.49
3.31
12.64%
IT
Gartner
404.95
-59.39
-12.79%
Forrester Research Earnings Call Summary
Earnings Call Date: Feb 11, 2025 | % Change Since: -38.94% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Neutral
Forrester has completed a major product transition and made strides in AI and client engagement. However, significant challenges remain in revenue performance and specific business segments like events and consulting. The company is focused on improving retention and growth strategies moving forward.Highlights
Forrester Decisions Transition Completion
Forrester successfully completed the transition to Forrester Decisions, with 80% of contract value now in the FD portfolio.
Generative AI Tool Izola Rollout
Forrester's generative AI tool, Izola, went into full availability mid-year and became the third highest destination on the Forrester website.
Client Contract Value Growth
Contract value per client increased by 10% from $143,000 to $158,000 by year-end 2024.
Retention Improvement
Retention improved by 2 percentage points, and the percentage of CV in multi-year contracts grew from 62% to 69%.
Successful Product Launches
Launched new services like Forrester Decisions for data, AI, and analytics, enhancing their offerings in data strategy and governance.
Lowlights
Revenue and Contract Value Decline
Revenue declined by 9% for Q4 and 10% for the full year, with a 5% decline in contract value.
Events Business Challenges
The events business faced a 42% decline in Q4 and a 34% decline for the full year due to lower sponsorship revenue and ticket sales.
Consulting Revenue Decrease
Consulting revenues decreased by 8% in Q4 and 18% for the full year.
Challenges in Smaller Tech Sector
Continued challenges with smaller tech vendors, especially in high-tech fields and regions like India.
Headcount Reduction
A workforce reduction of approximately 6% was implemented to align costs with revenue outlook.
Company Guidance
During Forrester's 2024 fourth quarter and full-year conference call, several key metrics and guidance were provided. The company completed its transition to the Forrester Decisions platform, now constituting 80% of contract value (CV), with CV per client increasing by 10% to $158,000. Multi-year contracts rose from 62% in 2023 to 69% in 2024. However, CV declined by 5% for the year, leading to a 9% revenue decrease for the quarter and 10% for the year. Retention improved by 2 points, and the consulting business showed recovery later in the year. Despite a challenging events business, attendee experience scores remained high. A 6% workforce reduction was implemented to align costs with revenue expectations. For 2025, Forrester anticipates flat CV growth, with revenue expected to decrease but cash flow returning to historical levels. The company aims to enhance retention, drive growth, and improve event strategies to bolster CV growth.Forrester Research Corporate Events
Business Operations and StrategyFinancial Disclosures
Forrester Research Reports 2024 Financial Results
Negative
Feb 11, 2025
Forrester Research announced its financial results for the fourth quarter and full year of 2024, revealing a challenging period with a 5% decline in contract value to $307.6 million, and total revenues down for both the quarter and the year. The company reported a GAAP net income of $0.4 million for the fourth quarter, an improvement from a loss in the same period the previous year, but a net loss for the full year of $5.7 million. Despite these results, 80% of Forrester’s contract value has migrated to the Forrester Decisions platform, marking a significant transition. The company aims to focus on increasing retention rates, expanding both existing and new accounts, and enhancing its events platform for growth in 2025, positioning itself for a return to contract value growth.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.