Fiserv earnings missed by $0.61, revenue fell short of estimates
Investing.com -- RBC Capital Markets has initiated coverage on Trustpilot Group Plc with an “outperform” rating and a price target of 290p, saying the company has “turned first-mover advantage into strong market positions in its key regions and is executing on its shift to higher value, stickier Enterprise customers.”
The brokerage said customers paying more than $20,000 annually have grown at a compound annual growth rate of 37% over the past two years, adding that the shift “should continue to drive higher quality growth, accelerating the network effects, support NDR and drive higher-value new contracts (c.$25k versus c.$7k), with greater prospects for upsell.”
RBC forecast a constant-currency sales CAGR of about 16% from fiscal 2024 to 2027, with adjusted EBITDA margins improving from 11.4% to 17.1%.
It projected Net Dollar Retention (NDR) to remain around 100%, supported by 6.5-7% annual price increases and falling churn as the business mix shifts further toward enterprise clients.
The report noted that Trustpilot’s average Enterprise Annual Contract Value (AACV) stood at $25.5k, compared with $6.7k for small and midsize businesses.
The company’s gross churn was about 14% as of the first half of 2025. RBC said the enterprise model “drives higher value, higher quality growth, accelerating the network effects that drive the business.”
The research added that product innovation has increasingly targeted larger clients, highlighting new features such as Market Insights, Review Spotlight, and TrustLayer.
“Trustpilot has cemented its commitment to product innovation with the strategic hire of new Chief Product Officer, Ciaran Dynes in early 2025,” the brokerage said.
Enterprise pricing was described as competitive in relation to its value. “The c.$25k annual subscription fee for the Enterprise solution is very well priced - the fee represents c.0.0071% of customer Jet2’s marketing budget, whilst a Bloomberg terminal costs c.$32k per annum,” RBC wrote.
“For that $25k, the customer can elevate its brand, build trust and gain valuable customer insights and importantly understand how it compares to peers.”
The coverage also pointed to Trustpilot’s strengthening client list, noting that new enterprise wins include easyJet, HSBC UK, P&O Cruises, Boots, Barclays, Pets at Home, Engie, Lindt, ING, Tui, Whirlpool, and Photobox, with North American clients such as Sonos, Fanatics, SurveyMonkey, Citizens Bank, and Vimeo.
In the note, RBC cited HSBC UK’s managing director of Wealth, Premier and Personal Banking, who said, “More than three quarters of consumers say they are more likely to trust a brand with a high Trustpilot score…Trustpilot reviews also help us connect with our customers through genuine independent feedback, giving us the opportunity to listen, learn and make improvements.”
The report also referenced Advent International’s Global Head of Data Science, who described the firm’s new TrustLayer product as “essential for a consumer investor,” saying, “A customer sentiment analysis, typically relying on Trustpilot data, is part of virtually every consumer investment diligence exercise we do.”
RBC added that Trustpilot’s regulatory positioning and fraud detection efforts could strengthen its long-term role in digital markets.
The company “maintains a constructive relationship with the regulators in what is now a regulated industry, leveraging its proprietary tech to drive content authenticity,” it said. In fiscal 2024, 7.4% of total submitted reviews were removed for noncompliance or suspected fraud, according to the report.
The brokerage valued Trustpilot at 4.5x FY27e EV/Sales, saying the stock had “de-rated 50% since February on an EV/Sales basis despite upgrades,” and that the target multiple supports the 290p price target. At initiation, Trustpilot shares were priced at 213.8p, implying a 36% upside.
RBC said Trustpilot’s strong cash generation “will likely continue to fund buybacks, having returned c.£90m across FY24 and FY25.”