Yahoo Finance
Jan. 28, 2026
Q3 2025 Data
Price: $7.84, Shares: 19m, Cap: $149m
Summary
*Forrester is a major player in research and advisory service industry mainly for IT sector. Its business went downward caused by the transformation to its Forrester Decision platform started at 2022.
*Since 2025, there was a great concern that AI will disrupt the research and advisory industry in the market. The growth in the whole industry slowed down. The sentiment of the whole industry shifted.
*Forrester's had finished its transition to new platform. Its business shows the sign of stabilization lately. The AI disruption concern seems over-stated. The stock is currently traded as at a very attractive valuation.
Business
(1) History
Forrester Research, Inc. was founded in 1983 by George Colony as an independent technology‑research firm. Its early decision to focus on annual, multi‑user research contracts created a recurring‑revenue model similar to modern SaaS economics and became the backbone of its business development.
Through the late 1980s and 1990s, Forrester expanded its coverage from IT infrastructure into how technology changes markets, customer behavior, and corporate strategy, which enabled it to sell larger licenses to major “user” enterprises and technology vendors.
In the early 2000's it took aggressive expansion during in the IT bubble. Soon the bubble busted and it cut costs and survived the bust. It grew rapidly for the next few years. Both revenue and profit were up.
From 2009 to 2018, the financial crisis seems did not affect the business too much. However, growth slowed as the mix shifted from high‑margin research toward more one‑time consulting and events, leaving only about 60% of revenue from research contracts and 40% from non‑recurring businesses. This constrained margins and its profit stayed almost the same during those years.
In January 2019 Forrester acquired SiriusDecisions, a B2B research and advisory firm focused on operational frameworks and benchmarks for marketing, sales, and product leaders. It costed 246 million in cash, adding roughly 350 employees and $79 million in annual revenue.
During the Covid, with great demand for needs to go online, its business was skyrocketed. In 2021, based on the SiriusDecisions platform, it launched Forrester Decisions, which integrates Forrester and SiriusDecisions content into a single, role‑based research platform. Forrester has been migrating legacy research clients to Forrester Decisions and directing most new customers onto it.
It has high hope for the platform at the beginning. However, the transition didn't turn out as expected. Although the share of total CV in Forrester Decisions rose from about one‑third at the end of 2022 to roughly 62% at the end of 2023 and about 80% by year‑end 2024, many customer didn't renew their subscription. By Q3 2025, its revenue dropped around 30% from its peak at 2022.
(2) Product & Services
Research:
Mainly the Forrester Decisions platform. It bundled research reports, analyst guidance, peer support etc. It also includes a proprietary AI tool called Izola that its customer can use to provide instant answers of customer's questions. Currently Forrester Decision accounts around 80% of its CV. The rest of its CV is from Legacy research product(5%) and reprints(15%) which is reports licensing.
Flagship product in research is called Forrester Wave. It graphically compares and ranks top vendors in specific technology or service markets based on their current offerings, strategies, and market presence, categorizing them as Leaders, Strong Performers, or Contenders to guide buyer decisions.
Consulting:
It is less profitable than the research segment and much volatile. It accounts around 25%-30% of its revenue. From 2010 to 2019, it became an even larger portion of its revenue. During the transition to Forrester Decisions platform, consulting revenue dropped much rapidly than the research revenue. Currently, it accounts around 25% of total revenue again.
Events:
Events is historically not a big part of its business. It is intent to be as a tool for lead generation and increase customer loyalty.
(3) Industry
Major competitors:
Gartner:
The dominant player in industry. Its flagship product is called Gartner Magic Quadrant. Gartner is vastly larger and more profitable than Forrester: in 2024 Gartner generated about $6.3B in revenue with about $1.3B in net profit (around 20% net margin). During 2025, its share price drop by over 50%. Currently, its market cap is around $17B which is still around 2.5x of its revenue.
IDC:
A subsidiary of International Data Group (IDG) which is privately held. Its flagship product is called IDC MarketScape. Its annual revenue might be around $600m.
(4) Seasonality
The first quarter seems always the lowest and the second quarter is the strongest.
(5)Employees
Currently, it has around 1500 employees which is 25% less than the peak number of 2000 in 2022.
2. Management
(1) Management
George Colony: He is the founder of the company. Had led the company through several recession/downturn.
(2) Ownership and Compensation
George Colony: 7.4m shares. 39%. During 2023&2024, he took very modest compensation($200k) from the company.
3. Financial data
Notes: debt
As Q3 25: Cash: around 130m. Debt: 35m. Deferred revenue around $140m
Notes: Share Data
Shares outstanding: 19m. RSU 2m.
Options: 400k at price > $16.
4. Valuation and comments
(1) The company had went through several downturn in the past including the 2000 internet bubble, the 2008 financial crisis, etc. Its cost seems mostly not fixed.
(1) The company had went through several downturn in the past including the 2000 internet bubble, the 2008 financial crisis, etc. Its cost seems mostly not fixed.
(2) The research segment is its most important part. For the past 3 years, its research revenue and CV has a accumulated decrease of around 17% while total revenue had dropped around 26% from the peak. It did much better than the other two segment.
(3) Its profit shows stabilization during past several quarter. Both operating cash(w/o working capital change) and EBITDA show YoY growth in Q3 2025. Those are mainly from the cost cutting measure. Its employee numbers also increased in QoQ in Q3 2025 which is the first in the last 3 years.
(4) Its client retention and wallet retention has been stable in the past 3 years. There is no obvious acceleration in revenue decline. At the same time, its CV/Client actually grew from around $120k to $160k with total number of clients dropped from 3000 to around 1800. This indicates the churns are mainly from its smaller clients. The uncertainty of economy outlook should have affect some of its smaller customers.
(5) So far there isn't any new venture that utilize generic AI to replace research analyst. The main pressure in the industry are caused by sentiment change and customers are more reluctant to pay high price for the research service.
(6) Both Gartner and Forrester are now utilizing AI either internally or open to customer as well. The AI transformation is actually critical for its business. So far, the Izola AI seems doing quite well. However, internally, it seems the utilization of AI hasn't improved its efficiency.
(7) Currently, it is still generates close to $400m in annual revenue and $20m to $25m in real income. Current market cap is only around $150m which is very cheap.
5. Risk
(1) The revenue and CV drop might continue for a while or even get worse. It also might not be able to maintain current profit level by cost cutting.
(2) Although the threat of AI replacing analyst so far is not obvious. It is possible that new disrupter will enter the market with much lower costs in the future.
(3) With the using of AI, the whole industry should be able to lower their cost significantly. Currently, Gartner is much more efficient than Forrester. It could face tough competition if its competitors lower their price.
(4) The Izola platform might cannibalize its own research business.
6. Conclusion
This company is currently still in a turnaround stage and it is traded at a very attractive price. I think the market had overreacted to the AI transformation narrative. Although there are quite some uncertainty ahead, it will eventually go through the downturn.
7. Links
