Digital review platform Trustpilot recently achieved a market valuation exceeding $1 billion, with its shares recovering above their 2021 initial public offering price. This resurgence, fueled by a robust trading update, places the company’s valuation at a premium that significantly outstrips many traditional UK market benchmarks, suggesting a complex interplay of growth expectations and evolving investor demographics.
- Trustpilot’s market valuation has surpassed $1 billion.
- The company’s shares have recovered above their 2021 Initial Public Offering (IPO) price.
- Trustpilot reported its first net profit last year.
- The company forecasts a 14% full-year EBITDA margin for the current year.
- US investors now constitute approximately 40% of Trustpilot’s investor base.
- Its valuation, while a premium in the UK, appears more aligned with US Software-as-a-Service (SaaS) peers.
The company, which reported its first net profit last year, saw its shares climb after forecasting a 14% full-year EBITDA margin. This represents a notable increase from just over 11% when adjusted for stock option costs and one-off transaction or restructuring expenses. This strong financial performance propelled its market capitalization beyond the $1 billion mark and pushed its share price to levels reflecting more than 70 times this year’s projected earnings per share, and a still robust 54 times forecasts for 2027.
Trustpilot’s Business Model and Valuation
Trustpilot’s revenue model is predicated on offering tiered subscription services to businesses, enabling them to monitor and engage with customer reviews on its platform. The core value proposition lies in its perceived independence, fostering consumer trust and providing businesses, from small enterprises to large corporations, with crucial credibility and data analytics insights. While large tech entities like Google and Amazon incorporate review functionalities, these typically represent a minor component of their broader offerings, distinct from Trustpilot’s specialized focus.
When assessed against its UK peers, Trustpilot’s current valuation appears exceptionally high. As a mid-cap entity, its price-to-earnings multiple of over 70 significantly surpasses other companies in the FTSE 250, such as Raspberry Pi and Burberry, which currently trade in the 40s. Even established businesses like property portal Rightmove or software provider Sage typically trade around 26 times earnings, highlighting Trustpilot’s distinct valuation premium within the UK market.
The Influence of US Investors
A key factor potentially influencing this elevated pricing is the increasing presence of US investors, who now constitute approximately 40% of Trustpilot’s investor base—a substantial increase, doubling their representation from a year prior. When viewed through the lens of US subscription software-as-a-service (SaaS) companies, Trustpilot’s valuation sits more centrally within a wide spectrum. This range extends from over 200 times earnings for data analytics firms like Palantir Technologies down to around 20 times for customer relationship management providers such as Salesforce.
Ultimately, Trustpilot’s valuation reflects a divergent market perception, where the same company can be viewed as significantly overvalued in one geographic context while appearing more aligned with industry standards in another. This dynamic underscores how varying market benchmarks and investor appetites can lead to distinct pricing rationales for global businesses, even without a change in listing geography, illustrating the complex interplay of regional market dynamics.
Jonathan Reed received his MA in Journalism from Columbia University and has reported on corporate governance and leadership for major business magazines. His coverage focuses on executive decision-making, startup innovation, and the evolving role of technology in driving business growth.