Investing.com -- Trainline shares fell over 11% on Thursday after the company reported full-year trading results that showed revenue and net ticket sales below expectations.
The company cited challenges from Google’s search engine changes impacting its international business.
Revenue for the year came in at £442 million, reflecting 12% growth year-over-year, but 1% below consensus estimates of £445 million.
Net ticket sales (NTS) also grew 12%, landing at the lower end of the company’s upgraded forecast range and missing consensus by 1%.
Despite the shortfall, adjusted EBITDA margin came in slightly ahead of the revised 2.6% NTS margin, with full-year EBITDA expected to remain at £156 million (+28%).
Morgan Stanley noted that while digital ticket penetration and app growth remained strong, the company faced headwinds from Google’s search algorithm changes, which weighed on its international business.
The company also announced a £75 million share buyback, following the completion of its existing repurchase program.
Trainline’s balance sheet showed estimated net debt of £52 million, with an enterprise value of £1.545 billion.
Morgan Stanley maintained its "overweight" rating on the stock with a 445p price target, but flagged downside risks, including political changes to the rail industry and increased competition in the UK and Europe.