Trainline (TRN) 326p

Market cap: £1.45 billion

Gain to date: 0.6% 

On 1 February Shares said that rail booking site and app Trainline (TRN) was ‘firmly on track for growth’ and investors should seize the momentum and buy the stock.

WHAT HAS HAPPENED SINCE WE SAID BUY?

Trainline shares have been on a rollercoaster. On the 14 March a year-end trading update revealed full-year performance ahead of guidance and the shares hit a 52-week high of 393p in response.

The stock then took a turn for the worse, losing as much as 13% in one week when the Labour Party announced plans to renationalise the UK railways. This raised the sceptre of any such move being accompanied by some sort of state-backed rival to Trainline’s ticketing platform. 

Then on 3 May, the company reported a positive set of results for the year ending 29 February – revenue was up 21% to £397 million and operating profit up over 100% to £56 million.

Net ticket sales were up 22% year-on-year to £5.3 billion, at the top end of the previously guided range.

Perhaps even more significantly, Trainline revealed that Labour has informed the company it will not create a rival platform if it comes to power.

WHAT SHOULD INVESTORS DO NOW?

We remain upbeat about Trainline, with any competitive threat neutered for now. The company has already acquired a 60% share of the UK online market and has successfully tapped into the growing European market.

The Trainline rail app is now the most downloaded in Europe. International consumer net ticket sales recently surpassed £1 billion.

Analysts at Shore Capital said: ‘Trainline continues to see robust performance despite industrial action and attempts of new competition, and we believe the UK backdrop appears more encouraging versus 12 months ago, with Labour recently re-confirming there are no plans for the Government ticketing retailing website and app.

‘Furthermore, Trainline is well-funded to support expansion opportunities, platform enhancements and rollouts, as well as the announced share buyback plans.’ 

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