Trustpilot Group PLC

Trustpilot Group PLC (LSE: TRST) is an FTSE 250 listed, United Kingdom-based company that operates a digital platform that brings businesses and consumers together. The principal activity of the company and its subsidiaries consists of developing and hosting an online review platform that helps consumers make purchasing decisions and businesses showcase and improve their service. This Report covers the Key Recommendation Rationale, Conclusion, and Recommendation on the stock.

Key Recommendation Rationale – Sell at GBX 286.24

• Resistance near Current levels: TRST’s stock price has breached Resistance (R2) which was stated in the previous report on 25 March 2025 therefore, there can be a possibility of a decline from resistance levels. Considering the market conditions and the price action, it is prudent to exit the stock.
• Declining EPS Despite Decent Operational Metrics: While Trustpilot achieved revenue growth and a 55% increase in adjusted EBITDA, both basic and diluted earnings per share (EPS) fell year-over-year—down 12% and 13% respectively during FY24. This decline may concern investors, as it suggests that bottom-line profitability isn't keeping pace with top-line and operational improvements, potentially due to non-operating costs, share dilution, or tax impacts. Sustained growth without a corresponding rise in per-share earnings could raise doubts about the company’s ability to deliver shareholder value.
• Substantial Drop in Cash Reserves - Trustpilot’s cash and cash equivalents declined by 25%, falling from $91.5 million in 2023 to $68.9 million in 2024. While the drop is partly attributed to a $43.2 million share buyback, such a significant reduction in liquidity may raise concerns about capital discipline and financial flexibility. If the macroeconomic environment worsens or investment demands rise (e.g., further product development or M&A), the company may be more constrained in how it responds.

Valuation Methodology: Price/ Earnings Approach

Share Price Chart  

TRST Daily Technical Chart, Source - TradingView

Conclusion

TRST is expected to trade at a discount, considering the Substantial Drop in Cash Reserves and fears of global slowdown. For conducting the valuation, the following peers have been considered - Baltic Classifieds Group PLC (LSE: BCG), Audioboom Group PLC (LSE: BOOM) and others.

Given its current trading levels, Declining EPS Despite Decent Operational Metrics, recent rally in the share price, relative valuation, and associated risks, it is prudent to exit the stock at the current levels. Hence, a ‘Sell’ recommendation is given on the stock at the current Market Price of GBX 286.24 as of 15 July 2025 at 09:45 AM GMT+1.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 15 July 2025. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level which the stock is expected to reach as per the relative valuation method and/or technical analysis taking into consideration both short-term and long-term scenario.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the London Stock Exchange (LSE) and or REFINITIV. Typically, both sources (LSE and or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.’

Note 6: Dividend Yield may vary as per the stock price movement.