Forrester Research, Inc. (NASDAQ:FORR) defied analyst predictions to release its second-quarter results, which were ahead of market expectations. The company beat both earnings and revenue forecasts, with revenue of US$129m, some 5.4% above estimates, and statutory earnings per share (EPS) coming in at US$0.43, 36% ahead of expectations. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Forrester Research

Following the latest results, Forrester Research's three analysts are now forecasting revenues of US$490.4m in 2021. This would be an okay 4.0% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to leap 58% to US$0.91. Before this earnings report, the analysts had been forecasting revenues of US$479.5m and earnings per share (EPS) of US$0.69 in 2021. So it seems there's been a definite increase in optimism about Forrester Research's future following the latest results, with a sizeable expansion in the earnings per share forecasts in particular.

Despite these upgrades,the analysts have not made any major changes to their price target of US$56.00, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Forrester Research at US$58.00 per share, while the most bearish prices it at US$54.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Forrester Research's past performance and to peers in the same industry. The period to the end of 2021 brings more of the same, according to the analysts, with revenue forecast to display 8.1% growth on an annualised basis. That is in line with its 9.3% annual growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 7.5% per year. So although Forrester Research is expected to maintain its revenue growth rate, it's only growing at about the rate of the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Forrester Research following these results. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. The consensus price target held steady at US$56.00, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Forrester Research going out to 2022, and you can see them free on our platform here..

We don't want to rain on the parade too much, but we did also find 2 warning signs for Forrester Research that you need to be mindful of.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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