Morgan Stanley's analyst, Ed Young, has revised the price target for Trainline (TNLIF, Financial), adjusting it downward from 405 GBp to 370 GBp. Despite this reduction, the firm maintains an Overweight rating on the company’s shares, indicating continued confidence in Trainline's potential market performance. The adjustment reflects an updated assessment of the stock's future value while still recognizing its strengths within the market.
TNLIF Key Business Developments
Release Date: May 07, 2025
- Net Ticket Sales: Increased 12% to GBP6 billion.
- Revenue: Grew 12% to GBP442 million.
- Adjusted EBITDA: Increased 30% to GBP159 million.
- UK Consumer Net Ticket Sales: Grew 13% to GBP3.9 billion.
- International Net Ticket Sales: Grew 4% to GBP1.1 billion.
- Trainline Solutions Sales: Increased 20% to GBP941 million.
- Gross Profit: Up 15% to GBP352 million.
- Marketing Costs: Increased 5% to GBP71 million.
- Other Admin Costs: Up 6% to GBP122 million.
- Adjusted EPS: Increased 56% to 19p.
- Operating Free Cash Flow: Grew 20% to GBP110 million.
- Share Buyback: GBP154 million of shares repurchased and canceled.
- CapEx: GBP43 million, with total CapEx next year expected around GBP50 million.
- Customer Base Growth: Increased 9% to 2.3 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Trainline PLC (TNLIF, Financial) achieved a record operating performance with a 12% increase in net ticket sales to GBP6 billion and a 12% rise in revenue to GBP442 million.
- The company saw a significant 30% increase in adjusted EBITDA to GBP159 million, benefiting from strong top-line growth and operating leverage.
- Trainline PLC (TNLIF) is Europe's number one rail app, with a market-leading user experience and a substantial customer base of 27 million.
- Internationally, Trainline PLC (TNLIF) positioned itself as the aggregator of choice, particularly in Spain, where sales have almost tripled over the last two years.
- The company is leveraging AI to enhance user experience and has introduced an AI travel assistant to provide real-time travel and disruption information.
Negative Points
- Trainline PLC (TNLIF) faces near-term headwinds, including changes to Google's search results page, which have impacted web sales.
- The company anticipates a GBP150 million sales risk due to the expansion of TFL's contactless zone, known as Project Oval.
- There is ongoing macroeconomic uncertainty impacting foreign travel, including US inbound travel.
- The UK government is considering replacing top online retail sites with a single public sector app, which could affect Trainline PLC (TNLIF)'s market position.
- The company expects revenue growth to be slower than net ticket sales growth due to a reduction in the UK commission rate.
