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I've been looking for stocks to buy before the end of January. However, sheer cheapness is not the primary consideration.
A company's growth potential can be a large part of its value to an investor. With that in mind, I found a promising UK stock to consider in YouGov (LSE: YOU), the provider of research data and analytics.
A good earning history
TO “community” About 26 million people share their opinions to feed the company's surveys and data banks. YouGov services provide market and other information to many organizations. Today, the firm claims to be the “most sought after” pollster of the world.
Well, there's certainly money in it. Normalized earnings have increased at a rapid rate, as the record for several years shows:
| Year until July | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024(e) | 2025(e) |
| Earnings per share (EPS) | 7.81p | 12.1p | 13.7p | 13.7p | 19.1p | 33.5p | 44p | 56.3p |
| EPS Growth | 73% | 55.5% | 0 | 12.8% | 39.8% | 75% | 31.5% | 28% |
Looking ahead, the table includes City analysts' hefty double-digit percentage estimates for the current business year through July 2025.
For me, the strong earnings performance is what makes YouGov worthy of being described as a growth stock. However, it is no small fish and has a market capitalization of around £1.2bn, quite high for a FTSE OBJECTIVE stock.
However, established growth often comes with a price and that is the case in this case.
Compared to analyst estimates, and with the share price in the 1,080p ballpark, the forward-looking earnings multiple is just above 19. That compares with an average for the FTSE AIM market of close to 12.
So it's a full valuation and that situation adds a bit of extra risk for new shareholders. If the earnings growth rate slows in the future, we could see the earnings multiple contract, causing the share price to decline.
Can strong growth continue?
Competing organizations could threaten YouGov's profits for years to come. However, the company is well established in its field. It could take a long time and a lot of money to dislodge the company from its dominant market position.
Meanwhile, the balance sheet is strong, with a net cash position rather than net debt, suggesting a well-funded company.
I am surprised by the weak performance of the share price in recent years. Although profits have increased, the share price has not. The graph tells the story:
Valuation has come down during the general macroeconomic turmoil we have seen. I see that result as an opportunity for investors to evaluate the business now.
Meanwhile, a selective acquisition policy is one of the current growth drivers.
For example, in January, the company announced the purchase of KnowledgeHound, a US-based provider of survey data management solutions. Directors said the move further expands YouGov's capabilities to handle the needs of big trademark.
On top of that, there has also been a recent acquisitive expansion in Europe.
A commercial statement will be published soon. However, to me, YouGov's growth engine appears to still be running. Therefore, I will delve into deeper research and consider buying shares before the end of January.
