Trustpilot Group PLC's (LSE:TRST) story in 2024 was one of steady progress, but also of being overlooked.
Despite consistently beating earnings expectations and delivering stronger retention in North America, shares in the online reviews platform had been caught in a broader tech sell-off.
At one point, the stock had fallen nearly 40% year to date. That decline has since been partially reversed, and analysts at Berenberg believe the recovery has further to run.
Following meetings with senior management in New York and a reassuring update at the company’s annual meeting, Berenberg has reiterated its 'buy' rating and maintained its price target of 420p. This implies more than 80% upside from the current share price of 230p.
Stable trading, stronger platform
Management told investors at Berenberg’s European conference that trading remains in line with expectations and reaffirmed the company’s aim to grow profitably.
Much of the recent improvement has come from better gross retention, particularly in the United States, where bookings growth reached 29% in the second half of last year and is now ahead of the group average.
That is a significant signal. Trustpilot’s model depends on strong network effects: the more reviews a business collects, the more valuable the platform becomes to both consumers and paying clients.
Retention is central to building this flywheel. Berenberg notes that account manager commission is now linked to retention targets, a structural shift that should help drive long-term customer lifetime value.
New growth engine in the wings
A soft launch for TrustLayer, a new product in development, is expected in the second half of this year. While details remain limited, analysts see it as a potential long-term driver of growth.
New product features help defend market share, particularly in North America, where competition remains intense and adoption patterns vary.
Chief executive Adrian Blair also clarified at the annual meeting that recently cited regional revenue figures were rounded estimates, not confirmed milestones. This helped ease concerns following confusion around commentary on achieving $250 million in annual recurring revenue.
Valuation and financial strength
Trustpilot currently trades at 4.3 times forecast 2025 revenue, which Berenberg sees as an attractive entry point for a software business delivering consistent double-digit revenue growth and expanding margins.
Adjusted EBITDA margins are expected to reach 13.4% this year, rising to over 15% by 2027. The group also holds net cash of $69 million and carries no debt.
Berenberg’s investment case rests on operational leverage, improving free cash flow conversion and the potential for the shares to re-rate as sentiment recovers. Risks remain, particularly around US competition and new product uptake, but the underlying momentum is encouraging.
The message is clear: the platform is holding its ground, management has a credible plan, and expectations are being met. For now, that may be enough to rebuild confidence in the stock.