Forrester Research, Inc. (NASDAQ: FORR)

Sector: Industrials Industry: Consulting Services CIK: 0001023313
Market Cap 106.03 Mn
P/B 0.67
P/E -1.25
P/S 0.26
ROIC (Qtr) -42.54
Div Yield % 0.00
Rev 1y % (Qtr) -8.03
Total Debt (Qtr) 66.79 Mn
Debt/Equity (Qtr) 0.42
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About

Forrester Research, Inc., recognized by its ticker symbol FORR, is a global, independent research and advisory firm operating in the technology and business sector. The company is a leading provider of research, consulting, and events, empowering business and technology leaders across various functions to use customer obsession as a catalyst for growth. Forrester Research's main business activities involve offering research, consulting, and event services to clients in multiple countries and regions, including North America, Europe, and the Asia-Pacific...

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Investment thesis

Bull case

  • Strong tangible asset base of 246.16M provides 3.69x coverage of total debt 66.79M, indicating robust asset backing and low credit risk.
  • Robust free cash flow of 19.88M exceeds capital expenditure of 2.58M by 7.71x, indicating strong organic growth funding capability.
  • Robust tangible asset base of 246.16M provides 21.34x coverage of working capital 11.53M, indicating strong operational backing.
  • Retained earnings of 86.45M provide full 1.29x coverage of long-term debt 66.79M, indicating strong internal capital position.
  • Retained earnings of 86.45M represent substantial 0.55x of equity 157.67M, indicating strong internal capital generation.

Bear case

  • Operating cash flow of 22.46M barely covers its investment activities of (15.46M), with a coverage ratio of -1.45, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 22.46M provides insufficient coverage of deferred revenue obligations of 141.25M, which is 0.16x, raising concerns about future service delivery capabilities.
  • The company's operating cash flow of 22.46M shows concerning coverage of stock compensation expenses of 12.97M, with a 1.73 ratio indicating potential earnings quality issues.
  • Operating earnings of (79.21M) show weak coverage of depreciation charges of 22.69M, with a -3.49 ratio indicating high capital intensity and potential reinvestment needs.
  • High depreciation of 22.69M relative to operating cash flow of 22.46M, which is 1.01x suggests significant maintenance capital requirements affecting free cash flow.

Segments Breakdown of Revenue (2024)

Product and Service Breakdown of Revenue (2024)

Peer comparison

Companies in the Consulting Services
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 VRSK Verisk Analytics, Inc. 28.99 Bn 59.50 10.85 4.89 Bn
2 EFX Equifax Inc 23.01 Bn 48.18 7.65 4.81 Bn
3 BAH Booz Allen Hamilton Holding Corp 9.48 Bn 11.30 0.83 4.14 Bn
4 FCN Fti Consulting, Inc 5.36 Bn 20.13 1.45 0.74 Bn
5 HURN Huron Consulting Group Inc. 2.29 Bn 21.14 1.38 0.65 Bn
6 ICFI ICF International, Inc. 1.43 Bn 22.60 0.96 0.62 Bn
7 CRAI Cra International, Inc. 1.10 Bn 25.41 1.63 0.19 Bn
8 SBC SBC Medical Group Holdings Inc 0.48 Bn 11.17 2.71 0.03 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.26 1.96
EV to Cash from Ops. EV/CFO 4.82 5.36
EV to Debt EV to Debt 1.62 58.47
EV to EBIT EV/EBIT -1.37 18.59
EV to EBITDA EV/EBITDA -2.01 20.71
EV to Free Cash Flow [EV/FCF] EV/FCF 5.45 11.61
EV to Market Cap EV to Market Cap 1.02 -835.88
EV to Revenue EV/Rev 0.27 5.73
Price to Book Value [P/B] P/B 0.67 3.44
Price to Earnings [P/E] P/E -1.25 22.21
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.00 0.70
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 4.25
Dividend per Basic Share Div per Share (Qtr) 0.00 0.32
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 6.40
Interest Coverage Int. cover (Qtr) -28.89 92.47
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 40.48 -330.08
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 3.77 126.66
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 0.43
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -52.75 -18.91
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -272.46 -12.32
EBIT Growth (1y) % EBIT 1y % (Qtr) -2,352.79 -132.53
EBT Growth (1y) % EBT 1y % (Qtr) -18,433.33 -937.51
EPS Growth (1y) % EPS 1y % (Qtr) -1,185.71 -76.24
FCF Growth (1y) % FCF 1y % (Qtr) 260.46 -11.33
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -7.74 12.14
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.98 0.77
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.09
Cash Ratio Cash Ratio (Qtr) 0.36 2.02
Current Ratio Curr Ratio (Qtr) 1.06 4.88
Debt to Equity Ratio Debt/Equity (Qtr) 0.42 0.55
Interest Cover Ratio Int Coverage (Qtr) -28.89 92.47
Times Interest Earned Times Interest Earned (Qtr) -28.89 92.47
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -14.00 -16.97
EBIT Margin % EBIT Margin % (Qtr) -19.61 -96.24
EBT Margin % EBT Margin % (Qtr) -20.29 -22.60
Gross Margin % Gross Margin % (Qtr) 57.50 54.26
Net Profit Margin % Net Margin % (Qtr) -21.10 -25.32