Even with the stock market reaching record highs this year, not all FTSE shares have been so fortunate. In fact, there’s a long list of businesses struggling to keep up with the outperformance of large-cap enterprises. And among the most painful declines is Trustpilot (LSE:TRST), down 47%, along with Trainline (LSE:TRN), which has also seen its market-cap slashed in half.
But as painful as these losses undoubtedly are, the best buying opportunities are often among the stocks that have suffered a massive downturn. Just take a look at what happened to Rolls-Royce shares over the last five years.
So what happened to these businesses? And is now the time to think about buying?
What’s going on with Trustpilot shares?
2025’s been quite a volatile year for the software-as-a-service online reviewing platform. Despite posting strong financial results, concerns have been mounting about the platform’s reliance on a small number of key customers and seemingly lacklustre conversion rates.
Despite management’s efforts, around 97% of businesses on Trustpilot have a free account and don’t pay for a subscription to the service’s various tools for marketing and analytics. This bearish sentiment has since been sent into overdrive following a short-seller report published earlier this month.
The report accuses Trustpilot of “mafia-style” practices, facilitating fake reviews to extort non-subscription users, and ultimately trading its integrity for money. Trustpilot, of course, denies all of these allegations. But with sentiment surrounding its monetisation already a bit shaky, the report unsurprisingly caused many investors to jump ship.
What about Trainline?
Much like Trustpilot, Trainline’s latest financials have also been relatively strong. In the six months leading to August, net ticket sales jumped 8%, while operating profits charged ahead by 38% reaching £68m, thanks to successful cost-cutting efforts.
Yet, once again, it’s external forces sending the stock price in the wrong direction.
The chief concern surrounds the government’s Great British Railways plan to introduce a state-backed, commission-free ticketing platform. That’s a direct threat to Trainline’s business model, undercutting both its profit margins and competitive moat in a single move.
Needless to say, this new policy risk adds a lot of uncertainty even in the long run, with experts cutting share price targets and downgrading their recommendations to Hold.
A buying opportunity?
Taking a contrarian stance on high-quality companies impacted by short-term challenges is a proven recipe for tasty stock market returns. And looking at these two FTSE shares, there’s still a lot to like, especially since the recent sell-offs have dragged their valuations to much more attractive levels.
But out of the two, Trustpilot looks like the more interesting prospect, in my mind. While troubling, it’s important to remember that short seller reports are almost always exaggerated, and several inaccuracies have already been identified.
Subsequently, while the shares are still down, it has nonetheless already jumped back more than 23% since the report was published. Given the group’s solid fundamentals and the stock market’s propensity to overreact, I think the FTSE stock deserves a closer look.
