Investment Thesis
Forrester Research faces severe profitability challenges with negative operating income (-$21.8M) and net income (-$21.8M), compounded by liquidity concerns as current ratio falls below 1.0x. While positive free cash flow ($19.4M) and substantial cash reserves ($73.9M) provide a financial cushion, the company cannot service debt from operations and requires fundamental business recovery to justify equity investment.
Strengths
- Positive operating cash flow ($25.6M) demonstrates core business can still generate cash
- Strong cash position ($73.9M) provides runway and balance sheet flexibility
- Moderate leverage (Debt/Equity 0.33x) limits financial distress risk
Risks
- Current ratio of 0.92x indicates working capital deficit and potential liquidity constraints
- Negative operating margin (-21.8%) and interest coverage (-7.6x) show inability to cover interest from operations
- Massive anomalous gross profit ($279.1M) exceeding revenue ($85.5M) and 326.6% gross margin suggest significant one-time items, accounting irregularities, or data quality issues requiring investigation
Key Metrics to Watch
- Quarterly operating income trend and path to profitability
- Current ratio and working capital position for impending liquidity crisis
- Explanation of gross profit exceeding revenue and underlying business drivers
Financial Metrics
Revenue
85.5M
Net Income
-21.8M
EPS (Diluted)
$-1.14
Free Cash Flow
19.4M
Total Assets
409.1M
Cash
73.9M
Profitability Ratios
Gross Margin
326.6%
Operating Margin
-21.8%
Net Margin
-25.5%
ROE
-20.6%
ROA
-5.3%
FCF Margin
22.7%
Balance Sheet & Liquidity
Current Ratio
0.92x
Quick Ratio
0.92x
Debt/Equity
0.33x
Debt/Assets
74.1%
Interest Coverage
-7.57x
Long-term Debt
35.0M
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-05-09T08:21:43.077419 |
Data as of: 2026-03-31 |
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