Trustpilot share price has been in a strong downward trend since going public as demand for UK tech shares. TRST has dropped to an all-time low of 70.45p, which is about 85% below the highest point in 2021. This drop has brought its total market cap to about 292 million pounds.
Growth concerns remain
Trustpilot is a leading company in the reviews and advertising industry. The firm enables anyone around the world to leave a review of products and services that they use. It also allows companies to respond to these reviews.
According to its website, Trustpilot has more than 167 million reviews while the number of reviewed domains has surged to over 714k. The number of active domains in its ecosystem is more than 84k. According to SimilarWeb, Trustpilot’s website has over 45 million monthly users.
Trustpilot makes money in two main ways. First, it leverages its wide audience to deliver targeted advertising.
Second, companies sign up to Trustpilot to better manage reviews left by their customers. The standard package costs $224 per domain per month while the scale plan goes for $900 per month. It also has a more expensive plan for large companies. It also has other add-ons to these solutions.
Trustpilot’s business has been growing even as competition increases. For example, its bookings grew by 27% in 2021 to over $150 million while its annual run rate jumped to over $144 million. Its revenue rose to over $131 million.
The Trustpilot share price has crashed hard since going public a few months ago. This price action is mostly because of the slowing fundamentals for the company. With inflation and the cost of doing business surging, many analysts believe that most businesses are cutting their expenses. While Trustpilot is a useful platform, many small companies believe that they can still exist without its services.
Further, there are concerns about competition in the reviews industry. While the number of reviews in Trustpilot is increasing, people have more places to leave their comments. For example, the number of reviewers using free platforms like Twitter, Facebook, and Google has increased drastically.
Finally, Trustpilot is yet to break even, which means that it has a longer runway before it gets to profitability. Globally, investors have been selling unprofitable tech companies as interest rates rise. This explains why companies like Block and Affirm have all crashed in the past few months.
Trustpilot share price forecast
The daily chart shows that the Trustpilot share price has been in a strong bearish trend in the past few months. The stock’s sell-off accelerated when the company’s shares crashed below the important support at 125.60p, which was the lowest level in March.
TRST stock has also crashed below the 25-day and 50-day moving averages while the Relative Strength Index (RSI) has moved to the oversold level. Therefore, the outlook for the stock is still bearish, with the next key support to watch being at 65p.