Investor concerns about Trainline PLC's (LSE:TRN) UK competition and regulation are "overdone" according to analysts at Bernenberg, who have the stock as one of their 'top picks' in the European software and computing sector.
Shares have fallen 40% in the year-to-date, including 7% since results last week, which the broker says it largely due to concerns around the UK competitive and regulatory landscape.
"While acknowledging there is unlikely to be a big-bang-type catalyst that removes these concerns, we think they are overdone," said the Berenberg team.
Following the de-rating in 2025, the shares trade for 12 times 2026 expected earnings.
At such multiples, the analysts think Trainline "will increasingly become a potential takeout target for private equity houses".
And even if not, Berenberg argued that the current valuation is "too bearish" and provides "an attractive risk/reward for investors, and ultimately continued strong operational performance will support a re-rating over time".
It was highlighted that UK Consumer net ticket sales rose 13% in the 2025 financial eyar, while the International Consumer division reached profitability, marking a "key milestone."
For the current year, the broker expects 6-9% adjusted EBITDA growth and 15% adjusted EPS growth.
The firm has completed £154 million in share buybacks since September 2023 and has an ongoing £75 million buyback program, with Berenberg seeing potential for additional returns, forecasting £81 million of free cash flow this year.