On Friday, Deutsche Bank adjusted its outlook on Trainline Plc (LON:TRNT) (TRN:LN) (OTC: TNLIY), increasing the price target to £5.30 from the previous £4.70, while reaffirming a Buy rating on the stock. The adjustment follows Trainline's release of a trading update for the first half of the fiscal year 2025, which reported results surpassing expectations.
Trainline's total net ticket sales reached £3.0 billion, marking a robust 14% growth in constant currency, which outperformed Deutsche Bank's estimate of £2.86 billion.
Revenue growth outpaced net ticket sales, climbing 17% in constant currency to £229 million, again exceeding the forecast of £211 million. The UK Consumer business and Trainline Solutions both contributed significantly to this performance, with net ticket sales exceeding projections.
In the UK Consumer segment, sales grew by 15% to £2 billion, driven largely by an increase in the adoption of digital ticketing. Over the past 12 months, the penetration rate of e-tickets in the industry has risen to 51% from 46%. Trainline Solutions also saw a notable increase, with net ticket sales up by 19% to £449 million, thanks in part to the success of white-label products.
Internationally, net ticket sales were up 6% on a constant currency basis, aligning with the performance in the second half of 2024. The update highlighted the continued strength in the Spanish market as a noteworthy factor in the international sales figures.
InvestingPro Insights
Following the positive outlook from Deutsche Bank, Trainline Plc (OTC: TNLIY) also shows encouraging signs in its financial metrics and market performance. With a gross profit margin of 76.95% in the last twelve months as of Q4 2024, the company's profitability is impressive. This aligns with the reported growth in Trainline's net ticket sales and revenue, indicating efficient operations and strong market demand.
Moreover, Trainline's stock has experienced a significant return over the last week, which may interest investors looking for short-term gains. The company's P/E ratio stands at 45.22, and when adjusted for the last twelve months as of Q4 2024, it comes down to 35.44, suggesting that the stock is trading at a lower price relative to its near-term earnings growth potential. This is further supported by a PEG ratio of 0.75, indicating that the stock could be undervalued based on its earnings growth.
Investors should note that while the company does not pay dividends, analysts predict Trainline will be profitable this year, which is corroborated by its performance over the last twelve months. For those interested in further insights, there are additional InvestingPro Tips available, which provide a deeper analysis of Trainline's financial health and market position.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.