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It has been chalk and cheese for the FTSE 100 and FTSE 250 thus far this yr. Whereas the blue-chip index has powered 17% increased, the latter has laboured, rising simply 4.4%.
In some methods, that is comprehensible. FTSE 250 companies are much more uncovered to the UK economic system, which has hardly been firing on all cylinders for, nicely, seemingly eternally now. As such, investor curiosity in UK mid-caps as a class stays weak.
Nonetheless, sentiment for particular person companies can shortly change. I’ve seen this with a few turnaround FTSE 250 shares I’ve highlighted this yr — hydrogen inventory Ceres Energy and animal genetics agency Genus.
Yr thus far, they’re up 116% and 66%, respectively.
Europe’s main rail app
One other turnaround candidate that stands out to me within the FTSE 250 is Trainline (LSE:TRN). Its share value has crashed 43% since December 2024.
Trainline is Europe’s most downloaded rail app, with 27m customers (round 18m within the UK). It earns fee and charges on ticket gross sales, in addition to ancillary providers like journey insurance coverage and promoting.
In idea, as extra folks go for digital bookings, this market-leading agency’s share value ought to be doing nicely. Nonetheless, an enormous regulatory darkish cloud has been hanging over the tech agency.
Specifically, the UK authorities’s plan to launch a ticketing platform underneath Nice British Railways as a part of broader rail business reform. This might scale back Trainline’s dominance within the UK, making this an apparent threat.
On high of this, there’s the expanded pay-as-you-go contactless ticketing throughout extra of the rail community. Nonetheless, Trainline solely expects this venture to place round £150m of web ticket gross sales in danger (about 4% of its UK complete).
Tremendous-low valuation
Regardless of these potential challenges, I believe there are some things to love right here. First, Trainline seems to have a sizeable long-term progress alternative throughout a number of European markets.
Trainline is nicely positioned to scale in continental Europe, significantly in Spain, France and Italy as service competitors turns into extra widespread over the following few years. The three markets generate business passenger revenues of round €17bn every year, anticipated to develop to €23bn by 2030.
Trainline.
Moreover, the corporate has a thriving business-to-business operation (known as Options). This division gives ticketing expertise and information to rail corporations, operators and different journey apps.
In H1, Options noticed web ticket gross sales develop 18%, with income 5% increased at £94m (round 40% of complete group income). This high-margin unit makes up greater than 50% of income.
On its shopper app, Trainline has launched a personalised AI assistant, providing real-time rail journey recommendation, in addition to agentic instruments like refund processing with out human intervention. I doubt Nice British Railways’ app will show as progressive (however I might be mistaken).
It’s additionally encouraging to see the corporate shopping for again shares. In September, it launched a £150m programme, including to its earlier £75m buyback.
For FY26, ending February, the corporate expects web ticket gross sales progress of 6%-9%, and adjusted EBITDA progress of 10%-13%. So its hardly in dire straits.
Lastly, the inventory seems to be filth low cost, buying and selling at a ahead price-to-earnings (P/E) ratio of simply over 10 occasions. I can see why Berenberg analysts just lately put a value goal of 500p on Trainline.
That’s 104% above the present 245p — a value I believe cut price hunters ought to be aware and I see it as one to think about.
