YouGov poll a buy after pullback

When YouGov launched in early 2000, there were plenty who doubted it would ever get off the ground. First, it was an online-only market research and political polling business. Second, its two founders, Stephan Shakespeare and Nadhim Zahawi, had the unlikely pedigree of having run Jeffrey Archer’s unsuccessful campaign to become London mayor. Then it correctly forecast the margin of Labour’s 2001 election victory and people began to sit up.

Its subsequent growth has been phenomenal. With former Newsnight presenter and Evening Standard commentator Peter Kellner in the chair until recently, YouGov has grown into an international market research business to rival the likes of Harris Interactive and Greenfield Online in the US. With three recent acquisitions – in the US, Germany and Scandinavia – YouGov is close to achieving its ambition of being able to offer a global opinion panel and a global set of syndicated products. While figures for the year to the end of July showed turnover up a half to £14 million, sales are currently running at over £40 million. There are more than 300 staff worldwide.

Yet the share price has suffered in the recent market turmoil, coming back from over 200p to a current 142.5p. That appears to be down to nothing more than shifting sentiment to smaller companies. A statement out today confirms that trading in the current year is in line with the board’s expectations and that the integration of recent acquisitions is proceeding apace.

The market capitalisation of £154 million now looks modest for a business slated to make £10 million this year and £13.4 million next year – and generating earnings growth of between 20 per cent and 30 per cent a year. The core UK business grew by nearly two-thirds last year and new businesses in the business-to-business, opinion leader research and investment areas should keep the growth momentum going. The syndicated research product, BrandIndex, is being launched in the US. There is strong growth in the Middle East market.

All told, if you missed the boat on YouGov you now have a second chance to climb aboard at a reasonable price.