Broker tips: Trustpilot, Elixirr International

(Sharecast News) - Trustpilot shot higher on Friday as JPMorgan reiterated its 'overweight' stance on shares of the review platform. "With the shares having risen more than 30% on the day of the FY25 results, they are now -13% from recent highs, partly as a result of a recent block listing," the bank said. "We think this presents an attractive entry point into a uniquely positioned AI winner set to potentially compound earnings and free cash flow well above sector-average rates."

JPM said its model implies that Trustpilot could grow its adjusted EBITDA and free cash flow (less share based compensation) at a compound annual growth rate of more than 30%.

The bank also said Trustpilot was a clear AI winner that offers a unique value proposition to both customers and end users.

"With our model implying a circa 5% 2027e FCF (less share based compensation)) yield, we see a positive balance of risk/reward to Trustpilot's current valuation, driven by continued execution, particularly in its less mature North American market," it said.

JPM said that applying typical high-growth SaaS price-to-earnings and FCF multiples to its 2030 illustrative estimates implies that Trustpilot's shares could trade close to around £5 by December 2029, offering more than 100% potential upside to current levels.

Analysts at Berenberg initiated coverage on global management consultancy Elixirr International with a 'buy' rating and a 1,060p target price on Friday as it said the company's increased earnings quality post-IPO was not yet reflected in multiples.

Berenberg said Elixirr was "challenging larger, traditional, industry peers" by offering clients "a more bespoke, quality and high-impact range of services", mostly focused on AI, digital and data transformation.

"This has led to the company developing a strong track record of revenue growth, at a 31% CAGR over FY12-24, more recently aided by an M&A strategy that has materially diversified the group," said Berenberg.

The German bank expects this revenue growth to continue at a 22% compound annual growth rate over FY24-27, alongside continued adjusted underlying earnings margin stability at approximately 30%, resulting in an EPS CAGR of 18%.

"A FY26 P/E of just 10.7x (PEG of 0.64) or an EV/EBITDA multiple of 6.8x highlights Elixirr's mispricing relative to this growth, such that we initiate coverage with a 'buy' rating and a 1,060p price target (offering 52% upside)," said Berenberg.