Why did the YouGov share price just crash 37%?

The YouGov share price has been weak for a while. But that’s nothing compared to what happened after this profit warning.

| More on:
Young Black woman looking concerned while in front of her laptop

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

The YouGov (LSE: YOU) share price plunged 37% in morning trading on 20 June. That’s what a profit warning can do.

The company now expects full-year revenue of around £324-327m. Adjusted operating profit should be £41-44m, down from £48.3m last year.

That’s quite a miss, for a popular growth stock.

The company has “seen lower sales bookings than anticipated.” It added that “sales in our Data Products division have remained slow and we continue to see declines in fast-turnaround research services.

Future plans

The board told us that, as we head for 2025, it “will focus on optimising our cost base and prioritising investment in key growth areas such as upgrading our Data Products, continuing to build out our AI capabilities and enhancing our sales organisation to further capitalise on YouGov’s unique asset: its high-quality global panel and proprietary dataset“.

That rings a couple of alarm bells for me, not just about YouGov.

AI boom

AI? That’s a big growth star these days. And I fear things might get close to the dotcom bubble of 1999.

Back then, it was e-anything, or any talk of online, and jam-tomorrow investors piled in. Is AI the new e-commerce bubble?

AI does get people jumping aboard now. Look at Nvidia, which just soared past Apple and Microsoft to become the biggest company in the world. Its market cap is over $3.3trn. Yes, trillion.

YouGov isn’t on the same kind of ride, but it shows something that’s been common over the decades. When a popular trend stock fails to hit its targets, thump! The share price can crash down.


And I don’t like that bit about “optimising our cost base” too much, for a couple of reasons. One, and it gets me every time I read something like this, shouldn’t a company always strive to optimise its cost base?

And it’s a discouraging thing to hear from a company like this, when future growth depends on today’s capital expenditure.

So, does this mean I’d avoid YouGov shares like the plague?

No. Quite the opposite, in fact. I think we could be looking at a nice buying opportunity. I’d been watching YouGov since the heights of 2021, when it got a bit hot. It’s been steadily falling since.


Analysts saw soaring earnings for the next couple of years. They’ll mark those down a bit now, I expect. But today’s price crash drops the forecast P/E for 2026 to just 10. I reckon the earnings outlook could be pared back a fair bit, and still leave the stock looking cheap.

The main risk I see now could be a long spell in the dumps. When a growth champion turns pariah, it can be a long time before investors come back to it.

And profit warnings have a habit of coming in multiples.

So, I might wait until I see how 2024-25 starts to shape up. But the temptation is strong.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has recommended Apple, Microsoft, Nvidia, and YouGov Plc. 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.

More on Investing Articles

Investing Articles

Down 23%! Should I buy more CrowdStrike shares for my Stocks and Shares ISA?

Sometimes bad news can be good news for long-term investors. But is that the case for CrowdStrike in relation to…

Read more »

Investing Articles

2 UK shares near 52-week lows I’m considering snapping up

These UK shares are loitering near, or at, 52-week lows. Are these prime opportunities for our writer to boost her…

Read more »

Investing Articles

Unilever: a passive income stock with potential for decades of dividend growth

Stephen Wright thinks Unilever can keep reducing its share count for years to come. And this should help make it…

Read more »

Middle-aged black male working at home desk
Investing Articles

Worried about retirement? I’d buy high-yield dividend shares to build wealth

The number of pensioners enduring poverty in the UK looks set to rise. Investing in dividend shares could help Britons…

Read more »

Investing For Beginners

2 boring but beautiful FTSE 100 stocks to add to my ISA

Jon Smith runs over a couple of FTSE 100 stocks that he really likes the look of, even though they…

Read more »

Investing Articles

Here’s how I could supercharge my wealth by snapping up the best dividend stocks!

This Fool explains how dividend stocks play a crucial part of her aspirations to build wealth, and details one pick…

Read more »

Young female analyst working at her desk in the office
Investing Articles

Revenue up 10% and accelerated growth potential for this overlooked FTSE 250 company

Today's first-quarter update from this good-value FTSE 250 company keeps me keen on the stock as recovery and growth continues.

Read more »

Investing Articles

Here’s why I’m so bullish about the BT share price now

The BT share price shot up after FY results, and a couple of months on it's still up there. Might…

Read more »