Trainline Shares (LON: TRN) Struggling to Shift Sentiment – What is the Latest?

Trainline is set to report full financial year 2025 figures tomorrow morning before the market opens, with the TRN share price (LON: TRN) down 7.8% since the trading update for the period released on March 13th, and 30% since the start of this year.

The firm reported record net ticket sales of £5.91 billion for the fiscal year ending February 2025, marking a 12% year-over-year increase. Group revenue rose 11% to £442 million, supported by growth across all segments: UK Consumer (+13%), International Consumer (+12%), and Trainline Solutions (+12%). Despite these gains, shares plummeted 13% on the print, as markets focused on concerns about a potential state-backed competitor.

• October 2024: Shares surged 9.7% after raising FY2025 guidance (net sales growth to 12–14%, revenue to 11–13%).
• January 2025: The GBR announcement triggered a 7% drop.
• March 2025: FY2025 results and buyback news failed to offset competition fears, leading to a 13% decline.

The company attributed the sell-off to heightened anxiety over the UK government’s plan to launch Great British Railways (GBR), a unified rail governance body expected to introduce a public-sector retail platform by 2027. While Trainline emphasised that GBR’s impact would take years to materialise and stressed the government’s commitment to a “fair, open, and competitive” market, analysts noted lingering risks.

In response to the stock decline, Trainline announced a £75 million share buyback, following the completion of a £50 million program in June 2024. By March 7, 2025, the company had repurchased £119 million in shares (8% of outstanding shares), signaling confidence in its valuation. This move initially stabilised the stock, but the broader market’s focus on regulatory risks overshadowed the buyback’s positive signaling.

What is the concern surrounding GBR?

The Department for Transport (DfT) reignited investor concerns in January by announcing plans for a government-backed ticketing platform under GBR. Although the service is not expected until late 2026 at the earliest, Barclays analysts warned that consolidation of the UK’s 27 train operator websites into a single GBR platform could erode Trainline’s aggregator advantage.

Trainline has engaged policymakers to ensure competition law safeguards, arguing that GBR Retail should not receive preferential treatment. Management contends that their technological edge, such as AI-driven pricing tools and a user-friendly interface, will maintain their market leadership.

Analysts hold a consensus price target on Trainline shares of 438p, implying a perceived upside of more than 45% from the current price action ~290p. With price action clearly moving in contrast to the current view of the analyst community, tomorrow's call may provide further clarity, one way or another.

🟩 The Bull Case for LON: TRN

• European Expansion: Strong growth in Spain and Italy, with further launches planned in liberalizing EU rail markets.
• Financial Health: Debt-light balance sheet, robust cash flow, and ongoing share buybacks support shareholder value.
• Technology Leadership: AI-driven pricing and user-friendly platform differentiate Trainline from rivals.
• Undemanding Valuation: Forward P/E below sector average, with a consensus price target offering significant upside.

🟥 The Bear Case for LON: TRN

• Regulatory Threat: The impending launch of GBR Retail could erode Trainline’s UK market dominance and compress margins.
• Market Volatility: Recent sharp declines highlight sensitivity to macro and sector-specific shocks.
• Competitive Pressure: State-backed platforms and incumbent rail operators pose ongoing threats.
• Execution Risk: Failure to maintain growth momentum in Europe or navigate regulatory changes could derail the investment thesis.