Forrester’s Research Bookings Should Improve In 2H23, Says Analyst – Forrester Res (NASDAQ:FORR)

  • Barrington Research analyst Vincent Colicchio reiterated an Outperform rating on the shares of Forrester Research Inc FORR and lowered the price target from $48 to $39.
  • The company reported Q4/22 non-GAAP EPS of $0.45, which exceeded the analyst’s forecast of $0.34 and the FactSet consensus forecast of $0.33. 
  • The non-GAAP EPS upside versus the analyst’s forecast was primarily due to a gross margin overage of 150 bps and a selling, general and administrative (SG&A) cost shortfall of 4%, which more than offset a 2% revenue shortfall.
  • Revenue of $136.9 million was 2% less than the analyst’s forecast and 1% less than the FactSet consensus forecast.
  • The research subscription business, represented by Contract Value (CV), grew 3% YOY in constant currency in Q4/22, down four points from the prior quarter on economic headwinds, small client losses and transition challenges, the analyst said.
  • The analyst believes that the actions planned by management, including better sales force targeting of senior executives, should enable CV growth to improve in the second half of 2023.
  • The analyst reduced 2023 non-GAAP EPS forecast to $2.35 from $2.48 (mainly on lower revenue and adjusted operating margins) and introduced an initial 2024 non-GAAP EPS forecast of $2.72.
  • Price Action: FORR shares are trading higher by 3.93% at $33.04 on the last check Monday.

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