Is Forrester Research, Inc. overvalued or undervalued?

As of 5 November 2024, Forrester Research, Inc. has moved from an expensive to a risky valuation grade. The company appears to be overvalued, particularly when considering its P/E ratio of 130, which is significantly higher than peers like HireRight Holdings Corp. with a P/E of 57.62 and The Hackett Group, Inc. at 69.15. Additionally, Forrester's EV to EBITDA stands at 4.14, while its peer average is considerably lower, indicating a potential overvaluation relative to its earnings before interest, taxes, depreciation, and amortization.
The company's financial metrics further highlight its challenges, with a ROE of only 1.33% and an EV to Sales ratio of 0.40, suggesting inefficiencies in generating returns and sales relative to its enterprise value. In terms of stock performance, Forrester's year-to-date return of -28.46% and one-year return of -41.00% starkly contrast with the S&P 500's returns of 12.22% and 17.14%, respectively, reinforcing the notion that the stock is struggling in the current market environment.