Since 2026 kicked off, FTSE 250 passive index investors have already started enjoying a small but positive return on their investments. But for stock pickers, the story could be wildly different, especially if they own shares of Trustpilot Group (LSE:TRST).
In the first few weeks of the year, this FTSE 250 growth stock’s seen its share price climb by roughly 32.5%, transforming a £20,000 initial investment into a chunky £26,500!
What happened? And should investors be rushing to invest in this software-as-a-service (SaaS) enterprise before it’s too late?
Strong technology returns
The UK stock market doesn’t have many tech enterprises that typically prefer listing their shares in the US. And since its IPO in 2021, Trustpilot shares haven’t exactly been a stellar performer. But that seems to be changing.
Earlier this month, management provided investors with a trading update about the group’s performance throughout the whole of 2025. And despite being targeted by a scathing short-seller report late last year, the results absolutely smashed past analysts’ forecasts across almost every metric.
Total bookings are up 22% to $291m, its annual recurring revenue expanded by 28% to $296m, with total revenue growth landing at 24%, well ahead of the 18% the experts were expecting. To top things off, while specific earnings figures weren’t given, management confirmed that profits are also on track to beat the $37m forecast from institutional investors.
This surprise growth’s being driven by a variety of factors. But most notably, the company’s seeing a faster-than-anticipated rise in new business and enterprise accounts, along with more customers adopting the recently-introduced suite of AI tools.
So combining better-than-expected results, a depressed valuation triggered by an earlier short-seller report, and the announcement to extend its ongoing share buyback programme by £10m, it isn’t surprising to see Trustpilot shares charge ahead.
What could go wrong?
When it comes to reputation management, Trustpilot’s the global leader with an estimated 51.6% market share, dwarfing rivals such as Hootsuite (8.1%) and Yotpo (7.9%).
This scale’s a critical advantage, giving access to data and insights that its rivals simply don’t have. And it could explain why the firm’s AI tools are seemingly becoming so popular with new and existing customers to tackle tasks like fraud detection, answer engine optimisation, and ChatGPT integration.
However, that doesn’t make it a risk-free investment.
Management claims it’s removing millions of fake reviews from its platform. Nevertheless, allegations of allowing fake reviews on paying customer accounts are still seemingly on the rise. In fact, this was a central piece of last year’s short-seller report, which accused the company of mafia-like practices.
While such allegations are likely exaggerated, it nonetheless creates significant reputational risks. And for a business that relies on consumer trust, the perception of allowing inauthentic reviews onto its platform could create enormous opportunities for competitors while potentially attracting the attention of regulators.
The bottom line
Trustpilot’s recent share price surge is being driven by genuine operational improvement rather than pure speculation. But with the stock now trading at a forward price-to-earnings ratio of almost 50, the shares are far from cheap.
Personally, while I think it’s definitely a business worth watching, I believe there are far better growth opportunities within the FTSE 250 to explore today.
