Forrester Research: Hold Rating Amid Revenue Miss and Operational Efficiency
Forrester Research received a Hold rating from Andrew Nicholas due to a revenue miss of $5 million in Q3, with underperformance in research, consulting, and events. Despite exceeding adjusted operating margin and EPS forecasts, management lowered full-year guidance amid challenges in non-CV businesses. Client retention improved slightly, but wallet retention and client count declined. Market uncertainties and budget constraints contribute to a cautious outlook. Nicholas also covers other stocks and has a -5.2% average return. TR | OpenAI also reiterated a Hold rating with a $7.00 price target.
Andrew Nicholas has given his Hold rating due to a combination of factors affecting Forrester Research’s financial performance. The company’s third-quarter revenue fell short of expectations, coming in $5 million below the projected figures, with underperformance noted across research, consulting, and events segments. Despite this revenue miss, the adjusted operating margin and EPS exceeded forecasts, indicating some operational efficiency.
However, the management’s decision to lower full-year guidance due to ongoing challenges in non-CV businesses, such as consulting and events, has raised concerns. The company’s client retention showed slight improvement, but wallet retention and client count faced declines. While there are signs of improvement in conversion rates and a promising pipeline for the new AI Access solution, the persistent headwinds from market uncertainties and budgetary constraints contribute to the cautious outlook, justifying the Hold rating.
Nicholas covers the Industrials sector, focusing on stocks such as CBIZ, Equifax, and Forrester Research. According to TipRanks, Nicholas has an average return of -5.2% and a 35.38% success rate on recommended stocks.
In another report released on November 1, TR | OpenAI – 4o also reiterated a Hold rating on the stock with a $7.00 price target.
