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It has been chalk and cheese for the FTSE 100 and FTSE 250 up to now this yr. Whereas the blue-chip index has powered 17% greater, the latter has laboured, rising simply 4.4%.
In some methods, that is comprehensible. FTSE 250 corporations are way more uncovered to the UK economic system, which has hardly been firing on all cylinders for, nicely, seemingly without end now. As such, investor curiosity in UK mid-caps as a class stays weak.
Nevertheless, sentiment for particular person corporations 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.
12 months to this point, they’re up 116% and 66%, respectively.
Europe’s main rail app
One other turnaround candidate that stands proud to me within the FTSE 250 is Trainline (LSE:TRN). Its share worth 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 worth must be doing nicely. Nevertheless, an enormous regulatory darkish cloud has been hanging over the tech agency.
Particularly, the UK authorities’s plan to launch a ticketing platform below 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 danger.
On prime of this, there’s the expanded pay-as-you-go contactless ticketing throughout extra of the rail community. Nevertheless, Trainline solely expects this mission to place round £150m of web ticket gross sales in danger (about 4% of its UK whole).
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 provider competitors turns into extra widespread over the subsequent few years. The three markets generate business passenger revenues of round €17bn each 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% greater at £94m (round 40% of whole group income). This high-margin unit makes up greater than 50% of earnings.
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 could possibly be unsuitable).
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 grime 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 not too long ago put a worth goal of 500p on Trainline.
That’s 104% above the present 245p — a worth I believe cut price hunters ought to be aware and I see it as one to contemplate.
