With the business potentially at an important milestone, we thought we'd take a closer look at Trustpilot Group plc's (LON:TRST) future prospects. Trustpilot Group plc engages in the development and hosting of an online review platform for businesses and consumers in the United Kingdom, North America, Europe, and internationally. On 31 December 2022, the UK£402m market-cap company posted a loss of US$15m for its most recent financial year. As path to profitability is the topic on Trustpilot Group's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.
According to the 7 industry analysts covering Trustpilot Group, the consensus is that breakeven is near. They expect the company to post a final loss in 2024, before turning a profit of US$2.2m in 2025. The company is therefore projected to breakeven around 2 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 91% year-on-year, on average, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving Trustpilot Group's growth isn’t the focus of this broad overview, though, bear in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Before we wrap up, there’s one aspect worth mentioning. Trustpilot Group currently has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which typically has high debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.
There are key fundamentals of Trustpilot Group which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Trustpilot Group, take a look at Trustpilot Group's company page on Simply Wall St. We've also compiled a list of key aspects you should further examine:
Valuation: What is Trustpilot Group worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Trustpilot Group is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Trustpilot Group’s board and the CEO’s background.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.