Deutsche Bank starts coverage of Trustpilot at 'buy'

Deutsche Bank initiated coverage of review platform Trustpilot on Monday with a ‘buy’ rating and 331p price target.

"Ultimately, the value of Trustpilot's platform is underpinned by the legitimacy placed on its reviews, which we feel is supported by its open-ended platform allowing for independence, the scope of its proprietary data (circa 300m reviews), and the multitude of content integrity measures," the bank said.

"Since reaching adjusted EBITDA break-even in FY23, Trustpilot's momentum continues to accelerate due to three key self-help measures: (i) an increased sophistication within its pricing/packaging models, (ii) re-focused Google Tag Manager strategies in its less mature regions, and (iii) a focus on cost discipline," DB said.

"Combining the above with unit economics benefits underpins our 15%+ per annum top-line growth and +200bps per annum adjusted EBITDA margin expansion between FY24-26E."

Deutsche Bank said it views near-term execution risk as low due to high revenue visibility and a high-quality management team/board.

At 1310 GMT, the shares were up 4.6% at 268.75p.