The Motley Fool

Should I buy this FTSE 250 stock in September?

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

question marks written reminders tickets
Image source: Getty Images

I first covered FTSE 250 stock Trustpilot (LSE: TRST) in March when it made its London stock market debut. A few months have passed since then, so I think another look at the company is worthwhile.

Since Trustpilot’s listing, the stock is up almost 60%. Despite this rise, the shares remain on my watch list. Here’s why.

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. And if you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio.

Click here to claim your free copy now!

The update

Last month, the company released a short but sweet trading update. It’s worth noting here that it intends to announce its half-year numbers on 15 September. I’ll be watching out for this. But in the meantime, it gave investors an indication of what could be in store.

The firm expects to deliver total revenue of $62m in the six-month period. This is growth of 31% compared to last year and 22% on a constant currency basis. It uses the annual recurring revenue or ARR metric as well. Trustpilot reckons its ARR for the half-year will be $134m versus $99m in 2020, representing a 27% rise in constant currency.

The acceleration of the business has continued into 2021 as it expected. Bookings growth is likely to be 37% higher over the prior year. The company also reiterated its guidance for high-teens constant currency revenue growth for its full financial year, which is in line with its 2020 bookings growth.


These numbers are impressive and it appears that when Trustpilot does report all of its numbers in September, the results could be received by investors positively. But there’s no guarantee this will happen.

It has only provided its revenue or top-line figures for the six-months as a taster. There’s no indication what profits will be like. Profitability may have been hit and investors will only know when the half-year report is published in full. Let’s not forget that its financial update in July is the first key news the firm has delivered since it listed.

It’s also worth noting that in its IPO prospectus, the company was loss-making. I reckon this could be the case still, especially given that there was no mention about profits in the update. But this is just me speculating. I’ll have to wait and see what the numbers look like.

Broker views

While I may only have the FTSE 250 stock on my watch list, some brokers are bullish on the shares. Last month, Berenberg raised its price target on Trustpilot from 385p to 430p. The bank said that the company’s revenue and booking growth numbers were comfortably ahead of its 2021 full-year expectations.

The analysts maintain their ‘buy’ rating and pointed out that while no segmental detail was provided in the update, they believe there has been an increase in US revenue and bookings.

Berenberg also thinks that further disclosure on geographical performance, including ARR, bookings, revenue and consumer engagement, could act as a further catalyst for the shares at the half-year results. I’ll have to see it this turns out to be true.

Should I buy in September?

As I said, I’m only watching the FTSE 250 stock. So I won’t be buying in September ahead of its results. The shares are already trading close to all-time highs. This means that it’s likely to be sensitive to any negative news. I want to see more detail on its half-year performance before I dip my toe in.

Is this little-known company the next ‘Monster’ IPO?

Right now, this ‘screaming BUY’ stock is trading at a steep discount from its IPO price, but it looks like the sky is the limit in the years ahead.

Because this North American company is the clear leader in its field which is estimated to be worth US$261 BILLION by 2025.

The Motley Fool UK analyst team has just published a comprehensive report that shows you exactly why we believe it has so much upside potential.

But I warn you, you’ll need to act quickly, given how fast this ‘Monster IPO’ is already moving.

Click here to see how you can get a copy of this report for yourself today

Nadia Yaqub has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.