It’s been a shaky first half of the year for the FTSE 250, Britain’s mid-cap index. While the FTSE 100 has powered ahead with a 10% gain in 2025, the FTSE 250 has managed just 5.5%. And it’s still languishing nearly 10% below its 2022 peak of over 24,000 points.
But that might be exactly why it’s worth a look.
Historically, the FTSE 250 has outperformed the blue-chip index over the long term. And when sentiment shifts, some of its more bruised constituents can bounce back fast. So let’s look at two mid-cap stocks that have taken a battering this year but may recover in the second half.
Auction Technology Group
Auction Technology Group (LSE: ATG) has been on the auction block itself lately — or at least, that’s how it feels after the shares tumbled 35% this year.
Much of the damage was done on Monday (4 August) when the company issued a disappointing update. A 3% cut to its full-year margin guidance sent the shares into a 21% tailspin. There’s a risk the price could decline even more if investor confidence erodes further.
But here’s the thing: the fundamentals don’t look half as bad as the share price suggests.
The company recently snapped up Chairish, a high-end online vintage furniture marketplace, for $85m — a move that expands its reach into affluent US markets.
Its operating margin is still a healthy 21%, and its earnings have grown 89% year on year. Despite all the volatility, the balance sheet looks solid, with just £93.2m in debt and over £525m in equity.
And analysts clearly see potential. The forward price-to-earnings (P/E) ratio of 12.4 looks modest, and the average forecast is for a 76% increase in share price over the next 12 months.
Trainline
The second beaten-down contender is Trainline (LSE: TRN). The digital rail ticket platform will be familiar to anyone who’s ever tried to book the cheapest route across the UK or Europe.
The shares have had a mixed 2025 so far, but things may be turning around. Trainline was recently selected by the Rail Delivery Group to supply the tech for one of four pay-as-you-go rail trials — a potential game-changer.
Its latest results showed revenue up 11.4% to £442m, while earnings jumped 78%. The company is profitable too, with a return on equity (ROE) of 19.6% and manageable debt: £157.7m vs £282.7m in equity.
Again, the forward P/E of 13.5 looks fair, and analysts expect a 54% increase in the share price over the coming year.
But the company relies heavily on regulatory decisions and public sector contracts. If its digital ticketing initiatives are not adopted more widely by national rail operators, future revenue growth could stall.
The bottom line?
The FTSE 250 may be underperforming in 2025, but it’s often from these gloomy periods that the biggest gains are made. Auction Technology Group and Trainline are far from sure bets — but they’re profitable, growing, and trading on modest valuations.
For long-term value investors, the recovery potential makes these underdogs worth considering.
