- Berenberg sees upside to new 270p target
- Stock up nearly 40% since Shares said buy
- Strong growth underpinning market optimism
With more and more of us buying stuff online, it’s no wonder that we are increasingly reaching out to fellow consumers for their seal of approval (or gripes) about products and services, and that’s great news for reviews business Trustpilot (TRST).
The platform now hosts more than 300 million consumer reviews of products and services across hundreds of thousands of websites, according to half year results. Thousands of businesses now turn to Trustpilot for customer transparency and the underlying consumer data analytics it provides to clients, and its value to them is being proved by client retention rates of 101%.
STRONG GROWTH
That revenue, bookings and ARR (annual recurring revenue) increased 18%, 16% and 16% respectively is great news for investors, as is plans for a £20 million share buyback, around 3% of the shares in the market. But what really got the stock jumping was raised guidance.
‘Management now expects adjusted EBITDA (earnings before interest, tax, depreciation and amortisation) to be at the top end of market expectations ($18 million to $22 million)’, noted Berenberg in a note to clients. ‘Current full year 2024 (to Dec) adjusted EBITDA consensus is at $20 million, so we would expect a circa 6% to 10% upgrade.’
TRUSTPILOT - A GREAT IDEA
When Shares pitched Trustpilot as one of our investment ideas in January 2024 (see link below), the stock had already more than doubled in six months, yet we explained why that rally could easily continue. And it has, up nearly 40% since.
This begs the questions, just how far can this rally run, and how high can the share price go?
The consensus price target ahead of today’s results was 230p, according to Stockopedia data. Berenberg was already ahead of that at 260p, and has today lifted its projection to 270p, so another 21% from today’s 223p.
