Morgan Stanley has downgraded Trustpilot Group PLC (LSE:TRST), the London-listed consumer review platform, from 'overweight' to 'equal-weight', arguing that a 60% share price rally this year has left the risk-reward more balanced.
The American bank raised its price target modestly to 275 pence from 265 pence, implying roughly 6% upside from the current level of 261 pence.
Morgan Stanley said Trustpilot remains the clear leader in horizontal consumer reviews and a genuine beneficiary of artificial intelligence, with a credible path to 30% adjusted EBITDA margins by 2030 from 15.6% last year.
However, it noted that consensus estimates have now caught up with management's targets, with the market already pricing in margins of 24.4% by 2028 against the company's own goal of 25%.
At the start of the year, Trustpilot traded at roughly a 50% discount to a basket of similar growth software peers on an EV/EBITDA basis, Morgan Stanley said, but that gap has more than reversed, with the stock now sitting at a 25% premium.
The broker sees four key drivers supporting the margin story: a shift towards higher-spending enterprise customers, AI-driven efficiency gains, product-led upsell and geographic expansion, particularly in North America where penetration remains low at around 1-2%.
Customers paying more than $20,000 a year have grown at a 36% compound annual rate since 2022, while gross dollar retention has improved to 87% from 84% over the same period.
Morgan Stanley views AI as a net positive for Trustpilot, arguing that the value of trusted, independent review data should rise as fake content proliferates online and shopping journeys become more automated.
Trustpilot already ranks as the fifth most cited domain on ChatGPT globally, with AI-driven click-throughs up nearly 1,500% in financial year 2025.
The broker flagged risks around whether agentic commerce could weaken the flow of human reviews over time, potentially reducing the insight value that businesses extract from the platform.
In its bull case, Morgan Stanley sees the stock reaching 380 pence if US expansion accelerates and margins hit 33% by 2030, while its bear case of 105 pence assumes AI tailwinds reverse and margins stall at 20%.
The bank raised its 2028 adjusted EBITDA margin forecast to 24.9% from 24.5%, driven by lower general and administrative costs as AI continues to deliver efficiency gains across the business.