Forrester Research, Inc. (FORR - Snapshot Report) continues to pressure its multi-year high just above $33 after reporting a solid 25% earnings surprise from late April. With estimates on the rise and a bullish 28% next-year growth projection, analysts are optimistic on the longer-term picture too.
Forrester Research, Inc. provides business and technology consulting services worldwide. The company was founded in 1983 and has a market cap of $696 million.
Forrester reported better than expected Q1 results on April 29 that showcased the company's rebounding business coming out of the tough recessionary environment of 2009.
Sales were up 5% from last year to $59 million. Earnings came in at 25 cents per share, 25% ahead of the Zacks Consensus Estimate. In spite of one earnings miss three quarters ago, the company now has an average earnings surprise of 25% over the last year.
There were a number of highlights from the quarter, with Forrester's advisory services and other revenues up 14% from last year to $20 million, comprising 33% of total firm revenue for the quarter. The company also continues to maintain a strong international presence, where sales ticked up to 30% of its total revenue.
On the expenses front, Forrester did see a bit of slippage, with operating expenses up 5% from last year on higher commissions, bonus payouts and benefits.
Balance Sheet Strong
The company was also able to strengthen its balance sheet during the quarter, with its cash and marketable securities up $23 million to $283 million against no debt.
CEO George Colony sounded an optimistic tone on the quarter and the rest of the year, saying, "Renewal rates have returned to pre-recession levels. We are off to a very good start in a year of economic recovery."
The analysts have since raised estimates, with the current year up 6 cents on the good quarter to 93 cents. The next-year estimate is up 8 cents in the same time to $1.20, a bullish 28% growth projection.
In light of recent gains, the valuation picture is running a bit hot, with shares trading at 33X forward earnings, a premium to its peer's 18X. Its P/B of 2.17X however is deep into value territory and well ahead of its peer's 2.89X.
The trend line that has been driving prices for the last 15 months is still very much in play, and should continue to provide support on any weakness. The multi-year high above $33 is less than $2 away, take a look below.
Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the new Zacks Momentum Trader Service.