Forrester Research (FORR) AI Stock Analysis

• Market Cap: $198.54M
• Dividend Yield: N/A
• Average Volume (3M): 74.20K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.75
• Revenue Growth: -9.61%
• EPS Growth: -18170.36%
• Country: US
• Employees: 1,510
• Sector: Industrials
• Sector Strength: 83
• Industry: Consulting Services
• EPS (TTM): 0.11
• Shares Outstanding: 18,980,951
• 10 Day Avg. Volume: 63,746
• 30 Day Avg. Volume: 74,200
• PEG Ratio: -2.27
• Price to Book (P/B): 0.81
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -25.49
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $14.00
• Price Target Upside: 33.84% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 3

Forrester Research's stock score of 55 indicates moderate challenges. The company's financial performance is under pressure with declining revenues and negative profitability, impacting overall stability. Technical indicators suggest a bearish outlook, while valuation metrics are unattractive due to recent losses. However, the earnings call highlights potential for stabilization and growth in AI, which could offer upside potential if successfully executed.

Positive Factors

Contract Value

Recent emphasis on multiyear contracts is expected to drive improved contract value metrics, with multiyear contracts accounting for 69% of contract value in 2024, up from 62% in 2023.

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

Client and Contract Challenges

Client count declined 14% year-over-year and 6% sequentially, excluding divestitures.

Financial Outlook

The newly introduced 2025 guidance fell short of initial expectations across all key metrics, with a 5% year-over-year decline in contract value reflecting continued issues with both salesforce execution and end-market softness.

Full-Year Guidance

Full-year guidance was solidly below expectations, calling for revenue of $400 million-$415 million, adjusted operating margin of 8.0%-9.0%, and adjusted EPS of $1.20-$1.35, all below prior estimates.

Forrester Research Business Overview & Revenue Model

Company Description

Forrester Research, Inc. operates as an independent research and advisory services company. The company operates in three segments: Research, Consulting, and Events. The Research segment primary subscription research portfolio services include Forrester Research, SiriusDecisions Research, and Forrester Decisions, which are designed to provide business and technology leaders with a proven path to growth through customer obsession. This segment delivers content, such as future trends, predictions, and market forecasts; deep consumer and business buyer data and insights; curated best practice models and tools to run business functions; operational and performance benchmarking data; and technology and service market landscapes and vendor evaluations through online access. The Consulting segment provides consulting projecs, including conducting maturity assessments, prioritizing best practices, developing strategies, building business cases, selecting technology vendors, structuring organizations, developing content marketing strategies and collateral, and sales tools; and advisory services. The Events segment hosts in-person and virtual events related to business-to-business marketing, sales and product leadership, customer experience, security and risk, new technology and innovation, and data strategies and insights. The company sells its products and services through direct sales force in various locations in the United States, Europe, the United Kingdom, Canada, the Asia Pacific region, and internationally. Forrester Research, Inc. was incorporated in 1983 and is headquartered in Cambridge, Massachusetts.

How the Company Makes Money

Forrester 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.

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.

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.

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

• Technical Analysis Sentiment: Positive
• Last Price: 10.46
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FORR, the sentiment is Positive. The current price of 10.46 is above the 20-day moving average (MA) of 9.68, above the 50-day MA of 9.73, and below the 200-day MA of 14.69, indicating a neutral trend. The MACD of 0.12 indicates Negative momentum. The RSI at 58.56 is Neutral, neither overbought nor oversold. The STOCH value of 79.59 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FORR.

Forrester Research Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FCN	76 Outperform	$5.65B	22.51	12.46%	―	1.59%	-16.79%
HURN	76 Outperform	$2.60B	22.58	24.88%	―	8.83%	92.48%
CRAI	75 Outperform	$1.27B	25.25	23.18%	0.97%	8.49%	21.06%
ICFI	71 Outperform	$1.59B	14.86	11.64%	0.65%	1.95%	17.98%
Sector *	64 Neutral	$4.36B	12.05	5.23%	249.94%	4.13%	-10.23%
FC	60 Neutral	$293.00M	16.99	24.81%	―	2.53%	5.95%
FORR	57 Neutral	$198.54M	―	-45.64%	―	-9.61%	-18170.36%

Forrester Research Corporate Events

Forrester Research Reports 2024 Financial Results

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.