Can Forrester's Decisions Bundle Reverse Subscription Slowdown? This Analyst Thinks So - Forrester Res (NASDAQ:FORR)

- Barrington Research analyst Vincent A.Colicchio has assigned an Outperform rating on the shares of Forrester Research Inc FORR with a price target of $32.
- The analyst said the company’s key financial objective is to rapidly grow research Contract Value (CV), which is a source of high-margin recurring revenue.
- The analyst added that the company is targeting a large research market, which based on internal Forrester estimates represents a $78 billion annual market opportunity.
- The company introduced Forrester Decisions (FD), a new subscription-based, research product bundle in August 2021, which is expected to replace all legacy research subscription contracts by the end of 2024.
- The product is higher priced than the legacy research subscription products and consists of research, tools, frameworks, and consulting guidance and is designed to improve the job performance of 19 functional disciplines, noted the analyst.
- But research subscription bookings slowed in Q1/23 due to economic headwinds, client losses, and longer sales cycles for FD, commented the analyst.
- The CV performance was negatively impacted by wallet retention, which declined 11 points Y/Y, and a decline in new business growth.
- The analyst said plans to improve FD sales execution includes a realignment of the sales team and changing the way it calls on clients.
- The analyst is expecting a strong rebound in CV growth in the second half of 2024 as the economy improves and demand accelerates due to the disruptive impact of artificial intelligence technology.
- Price Action: FORR shares are trading lower by 3.09% at $29.21 on the last check Monday.

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