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. 

The post Can these FTSE 250 underdogs make a comeback in H2 2025? appeared first on The Motley Fool UK.

Here are two ideas I’ve got on my watchlist right now.

Getting off the ground

The first one is Wizz Air (LSE:WIZZ). Down just over 40% in the past year, the stock recently hit fresh 52-week lows.

The bulk of this fall has come over the past couple of months, with a disappointing earnings report from the start of August. Operating profit fell 44.2% versus the same quarter the year prior. This was mainly due to the fact that “well documented issues relating to Pratt & Whitney’s GTF engines led to the grounding of an average of 46 neo aircraft over the quarter“.

Naturally, if aircraft are grounded, it can’t be making money for Wizz Air via flights. Yet although this is a pain, it’s not a long-term problem. In fact, the business reported a 1% rise in passenger numbers in August despite the issue! Once this storm has blown over, I expect the share price to rally over the next year.

Wizz Air’s continuing to push forward, looking to take on more long haul options. This includes a new low-cost route from London Gatwick and Jeddah in Q1 next year. This has the potential to really boost profitability.

Looking for bidders

Another option is Auction Technology Group (LSE:ATG). The FTSE 250 firm’s down 47% over the past year. I put this down to the lower earnings per share results from the half year report, as well as a slowdown in the annual pace of growth.

For example, the company doubled revenue from 2020 to 2021, and almost doubled it again in 2022. So even though the business grew revenue by 13% last year, this was seen as a disappointment by some investors. The high benchmark some people have is a risk going forward.

The half-year 54% drop in earnings per share can partly be explained by the higher investment costs during the period. The CEO commented that “where we’ve invested, we are growing”. This indicates that investors will see the future benefits of the costs being taken on now.

I think the market’s overreacted and that the stock looks a good value buy. It has a strong hold on the online auction market. It’s not an easy area for a new company to break into. Further, with the increased spend on new tech capabilities and add-on’s, I can only see it attracting more customers going forward.

I think both UK shares are looking attractive and I have them on my watchlist to consider buying.

The post 2 UK shares down over 40% in a year that I think are worth buying appeared first on The Motley Fool UK.

Bringing together the old and the new

One business, called Auction Technology Group (LSE:ATG), also known as ATG, looks quite strong to me. It operates in the niche of digital auction platforms, and it helps the auction process to run more efficiently. In many respects, it’s helping to keep alive an old sales model by integrating new technology with it.

Auction houses can hire the company and make use of its platforms to list their auctions online. What’s great about this is that it opens up local auctions to a global audience. ATG also offers customer support and marketing.

While the firm faces a few notable competitors, it seems to have acquired most of the firms that offered any lasting threat to its market share. However, let’s not forget eBay, which has arguably continued to change the auction market and drastically reduce traditional auction services.

As such, I think ATG has quite a challenge on its hands in remaining competitive in its niche while also rivalling other digital offerings which focus more on a do-it-yourself model.

From overvalued to undervalued

This is quite a new investment opportunity, as the company had its initial public offering (IPO) in only 2021. ATG has had exceptional growth since then, but this is expected to slow down somewhat over the next three years. Thankfully, the market doesn’t seem to have priced the shares at too high a price. So, as long as the company is still growing, I think it presents an opportunity for me.

You see, around the time of the IPO, the shares almost doubled in price in less than a year. But this is quite common when a company first goes public, and before long, the market readjusts. What may have been an overvaluation then might be an undervaluation now. After all, it’s now down over 20% from the IPO price.

Therefore, as long as the company continues to deliver the growth it has and continues to generate a healthy profit, I think the investment should perform quite well. In my opinion, the wider stock market will soon recognise the value opportunity and begin driving the price back up.

Adapting to technological change

From reading the most recent annual report, I was impressed to see that ATG noted that innovation and change in its industry are rife. I believe this is now more true than ever, and I think the company would be wise to invest more heavily in machine and deep learning capabilities to drive not only efficiency in operations but also the potential expansion of its profitability margins. Failing to invest thoroughly and effectively in these new intelligent technologies could make the firm lose both investors and customers in the long run.

Certainly a great company

Overall, from my research, ATG has a unique and strong position in the future of auctioning. I take my time to make investments, so I’ve put it on my watchlist for now.

The post 28% revenue growth per year and down over 20% in price! Should I invest in this niche FTSE 250 company? appeared first on The Motley Fool UK.

Investors like what they see in the AGM trading statement. The key message is that trading in the three months to 31 December was in line with expectations.

In some ways then, we could argue that today’s move is likely to be something of a relief rally. After all, the operator of “world-leading” marketplaces for curated online auctions has seen its share price slipping lower for some time.

That kind of weakness in the chart suggests investors might have doubted the business can keep up its trading performance. No wonder. We’ve seen some difficult economic times lately and some enterprises have struggled.

Revenue and earnings up

However, in the firm’s first quarter, total revenue rose by 11% year on year. Within that figure, organic revenue lifted by 3%, suggesting a robust underlying performance. The directors said the business is being driven by strong growth in its value-added services.

The company’s auction marketplaces and auction services enable bidders from around the world to access secondary goods.  Some 4,000 auctioneer experts curate the goods from the two sectors of Industrial & Commercial and Art & Antiques.

Auction Technology runs eight online marketplaces and listing sites using its proprietary auction platform technology. It hosts around 86,000 live and timed auctions each year.

The directors reckon something of a virtuous circle benefits both auctioneers and bidders. Increasing numbers of bidders participating in online auctions can lead to higher realised prices for second-hand items. Then, the higher prices achieved tend to attract more assets for listing on the company’s marketplaces.

However, the trading record for the business shows losses rather than profits right through to the year ended September 2022 – no wonder the market has been sceptical. But things changed when positive profits arrived in 2023. Now, City analysts expect earnings to more than double during the current trading year.

Could it be that after years of struggling, the business is set to become a growth company set to soar throughout 2024 and beyond? Maybe.

Is long-term growth coming?

The directors are touting a “compelling” investment case. They reckon the market is growing structurally and moving online. Meanwhile, Auction Technology has a scalable platform model with proprietary auction technology.

By that description, Auction Technology appears to be well-placed in a decent sector. However, I reckon it’s worth digging deeper before buying any shares in the company. It could be that despite owning its technology, the firm’s services may be easily duplicated by competitors. So the level of strength of any economic moat here is unclear to me.

One of the main risks for investors is the short record of business profitability. It’s possible for the company to be experiencing a shorter-term pop in earnings. We need to see a longer period of performance to gain confidence.

Nevertheless, the outlook is optimistic. Meanwhile, City analysts have pencilled in a further double-digit uptick in earnings for 2025.  

On balance, I think Auction Technology is worth consideration and further research. The stock could make a useful, growth-focused addition to a diversified long-term portfolio.

The post Up 15% from its lows today, is this FTSE 250 stock set to be one of 2024’s winners? appeared first on The Motley Fool UK.

An auction that I’m bidding on

As a relative newcomer to the FTSE 350, Auction Technology Group (LSE: ATG) hasn’t had the easiest inaugural term. It made its stock market debut in February 2021. Since then, it has proven to be a company that can either outperform or underperform significantly.

Auction Technology Group specialises in providing online auction facilities to a global audience in a variety of niches — for example, antiques, art and fashion, as well as industrial and commercial equipment. As you can imagine, Covid-19 really boosted turnover into overdrive as in-person events were significantly reduced.

Revenue grew by over 100% compared to approximately 10% the year prior, and results have been strong since. The main caveat was that despite rising sales, costs grew proportionately and they failed to turn a profit. This remains my primary concern, but forecasts predict positive net profit for 2022 and if management can deliver, I might just make a late bid to buy the shares.

Software and sustainability

Another technology company that caught my eye was Aveva Group (LSE: AVV). With sustainability a top priority for every firm looking to both please shareholders and boost long-term prospects, Aveva’s services certainly look optimal for improving efficiency. Oil giants such as BP will be required to improve their operating efficiency and optimise their flexibility when adapting to a world fuelled by alternative energy. Aveva helps them and its other clients do just that.

By providing innovative engineering software, Aveva can reduce system decision-making time across supply chains and improve functional performance. Teamed with revenue growth of 47.9% and a forecast price-to-earnings ratio of only 22.8, relative to its three-year average of 33, I’m giving this company a good look at over the next few months.

Cyber security

The Darktrace (LSE: DARK) share price has plummeted by 55% since its October 2021 highs, and the company now trades at a market capitalisation of only £3bn. As a slightly more risk-averse investor, I do find the valuation slightly intriguing. Despite the lack of earnings and perhaps expensive price of its shares, Darktrace possesses something that is relatively rare for UK-based investors: a chance to invest in a reasonably large firm at the absolute cutting edge of technological advancement.

Darktrace pioneered the integration of AI and cybersecurity, sustaining a competitive advantage over larger peers for quite some time. With renewed cyber security interest as a result of the invasion of Ukraine, I’m going to wait on the sidelines but look slightly closer for now.

Before investing in any of these companies I’m going to see if central banks can restrain inflationary pressures. If they do, I’m interested.

The post 3 of the best technology stocks to buy in April appeared first on The Motley Fool UK.

Curated auction leader

The Auction Technology Group is the world’s leading curated auction marketplace provider. Over 2,000 auction houses use its technology and £6bn worth of items are sold each year. It launched on the London Stock Exchange via an initial public offering (IPO) in February and its share price has soared.

ATG supports existing auction houses by offering software, design and e-commerce solutions. It also runs the well-known auction sites i-bidder.com and BidSpotter. Furthermore, it has an antiques trade magazine and several additional marketplaces. I think the digital art craze for non-fungible tokens (NFTs) is renewing interest in auctions. Plus the stay-at-home economy has boosted revenues. In fact, group revenues rose 48% to £34.5m in the half year to the end of March. 

The ATG share price is up 45% since IPO. The company has a £1.1bn market cap and, as mentioned, is now in the running to join the FTSE 250. There’s a risk the reopening could reduce interest, but with a clear shift to e-commerce I feel bullish on the sector. I’d happily buy shares in ATG today.

Reviews giant

Another FTSE 250 contender is online review site, Trustpilot Group, was founded in Denmark in 2007 and launched via an IPO in March.

The Trustpilot share price has risen 20% since IPO and it now has a £1.3bn market cap.

It invests in its technology and big-data ecosystem to enhance ease of use for both users and clients. The site mission is to be open and collaborative, and it’s popular with consumers for providing unbiased website reviews It removed 2.2m fake reviews last year). The company makes money from paid products and services. The hook for businesses is they get an element of marketing and enhanced credibility for the business.

Keeping on top of fake reviews and ensuring a high level of trust is key for its ongoing success. Nevertheless, I think this looks like a great business and I’d consider buying Trustpilot shares, FTSE 250 member or not.

Ventilation specialist

Ventilation specialist Volution Group operates internationally. It sells its extractor fans and installations to consumers and businesses. The UK accounts for half its business, with Europe and Australia making up the rest.

Following the M&A roadmap to scale is a clear priority for Volution. For now, it sees many opportunities in the UK and Continental Europe, but doesn’t rule out considering North American prospects in the future.

So far, it’s financed its deals from its own cash generation. But it has noted it may move into issuing equity for future acquisitions. This could lead to share price dilution, so I imagine market reaction would depend on the quality and size of acquisition.

Commodity pricing pressures are another issue that could cause share price volatility for the group. Nevertheless, I like the outlook for this business. After the pandemic, demand for ventilation appears to be rising. It’s the same new territories as climate change raises temperatures. I’d consider adding Volution Group shares to my Stocks and Shares ISA.

The post 3 stocks tipped for the FTSE 250. Would I buy? appeared first on The Motley Fool UK.