I’ve been looking for stocks to buy before the end of January. However, pure cheapness isn’t the main consideration.
The growth potential of a business can be a big part of its value to an investor. With that in mind, I’ve found a promising UK stock to consider in YouGov (LSE: YOU), the research data and analytics provider.
A good earnings record
A “community” of some 26m people share their opinions to fuel the company’s polls and data banks. YouGov’s services then provide market and other insights to many organisations. These days, the firm claims to be the “most quoted” pollster in the world.
Well, there’s certainly money in it. Normalised earnings have increased at a brisk pace as the multi-year record shows:
| Year to July | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024(e) | 2025(e) |
| Earnings per share (EPS) | 7.81p | 12.1p | 13.7p | 13.7p | 19.1p | 33.5p | 44p | 56.3p |
| EPS growth | 73% | 55.5% | 0 | 12.8% | 39.8% | 75% | 31.5% | 28% |
Looking ahead, the table includes City analysts’ hefty double-digit percentage estimates for the current trading year and to July 2025.
To me, the strong performance on earnings is what makes YouGov worthy of being described as a growth share. However, it’s no minnow and has a market capitalisation of about £1.2bn – quite high for a FTSE AIM stock.
However, established growth usually comes at a price and that’s the case here.
Set against analysts’ estimates, and with the share price in the ballpark of 1,080p, the forward-looking earnings multiple is just above 19. That compares to an average for the FTSE AIM market somewhere close to 12.
So, it’s a full-looking valuation, and that situation adds a bit of extra risk for new shareholders. If the rate of earnings growth slows in the future, we could see the earnings multiple contract, causing the share price to fall.
Can strong growth continue?
Competitor organisations could threaten YouGov’s profits in the coming years. However, the business is well-established in its field. It could take a lot of time and deep pockets to unseat the company from its dominant position in the market.
Meanwhile, the balance sheet is strong, with a net cash position rather than net debt, suggesting a well-financed enterprise.
The weak performance of the share price over the past couple of years surprises me. Although earnings have been powering forward, the stock price hasn’t. The chart tells the story:
The valuation has shrunk during the general macro-economic upheaval we’ve seen. I see that outcome as an opportunity for investors to appraise the business now.
Meanwhile, a targeted acquisition policy is one of the ongoing growth drivers.
For example, in January, the firm announced the purchase of KnowledgeHound, a US-based survey data management solution provider. The directors said the move further extends YouGov’s capabilities to handle the needs of large brands.
On top of that, there’s also been recent acquisitive expansion in Europe.
A trading statement is due soon. However, to me, YouGov’s growth engine looks like it’s still motoring. So, I’ll dive in with deeper research and consider buying the stock before the end of January.
