[SharePad] Small-Cap Spotlight Report: TRUSTPILOT

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18 November 2022
By Maynard Paton

Read a set of company results, and chances are you will spot a reference to Trustpilot. Examples of quoted businesses mentioning the popular review website include:

  • AJ Bell: Our operational performance indicators have shown excellent levels of customer service as demonstrated by our high 4.5-star Trustpilot score.
  • AO World: “Over 350,000 Trustpilot ratings, averaging an “Excellent” 4.6/5 stars.
  • Big Yellow: “We have over 3,200 reviews from the independent review site TrustPilot. These reviews average a 4.7 out of 5-star rating, labelled as “Excellent” on the TrustPilot ratings scale.”
  • Procook: “We are pleased to have retained our excellent-rated Trustpilot score of 4.8.
  • Redde Northgate: “Customer satisfaction is the cornerstone of our business success and the ‘excellent’ satisfaction scores achieved across our businesses from Trustpilot.
  • Redrow: “We continue to be rated as ‘excellent’ on Trustpilot.
  • ScS Group: “Improved Trustpilot rating to the maximum 5 stars, maintaining our ‘Excellent’ rating with over 370,000 reviews.”
  • Travis Perkins: “The experience with Toolstation remains best-in-class with the business achieving a 4.6-star rating on Trustpilot.

With so many quoted companies trumpeting their Trustpilot reviews, is Trustpilot itself worthy of a 5-star investment rating?

Let’s take a closer look.

Read my full Trustpilot article for SharePad.

Maynard Paton

2 thoughts on “[SharePad] Small-Cap Spotlight Report: TRUSTPILOT”

  1. Excellent review Maynard, thank you.

    From a consumer perspective have always been sceptical about the usefulness of Trustpilot scores and the accuracy of customer reviews. I would pay more heed to a personal recommendation than accepting a Trustpilot score at face value. Similar comments apply to Checkatrade.

    Strikes me that the only winners here are the founder and senior management who continue to collect very generous rewards for generating increased turnover allied to continual losses and heavy cash burn. Their bonus and LTIP targets make it obvious they have little interest in their shareholders.

    There are several institutional holders (eg Liontrust, BlackRock etc) who clearly take a different view but I’m at a loss to share their optimism with Trustpilot as a worthwhile investment. No doubt further calls for cash will be required before too long. Maybe they reserve a small portion of investment funds for pure gambles and Trustpilot happens to be one of their gamble selections?

    Trustpilot appears no more than a punt as an investment where the risk / reward is heavily geared against the investor. The downside is obvious, the upside is doubtful.

    Your marking of 1 star for investment potential seems overly generous to me!

    Kind regards

    Peter Broughton

    • Thanks Peter. Glad you liked the review. Minimum rating on Trustpilot is 1-star I am afraid! Something I did not mention in the write-up was that if the 30% Ebitda margin was achieved on sales of $380m, then maybe earnings could be approximately £60m, which would then support the £400m market cap. But that if is a big if of course.



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