After it’s rocketed 41% in 2 months, is it time I bought this FTSE 250 growth stock?

Trainline (LSE: TRN) is a FTSE 250 stock that’s been hurtling uphill in recent times. It’s gained 41% in just the two months, and has surged by 153% since March 2022.

But it’s not the sharp rise that’s brought the train e-ticketing company to my attention as a possible investment. It’s the fact that I’ve used the app dozens of times over the past few years.

Peter Lynch famously told investors to “invest in what you know,” but only after using one’s knowledge of a company as a starting point for deeper research. It rarely pays to just blindly buy a stock.

So, should I invest in Trainline shares? Let’s dig in.

Why I’m interested

Looking at my phone, I realise that if I’d invested in all the companies behind the consumer-facing apps I regularly use, I’d have made fantastic triple-digit returns.

I should say I also use PayPal regularly, but its shares are down 20% in five years. However, the value created by the winners far outweighs this market straggler.

Perhaps that’s not surprising. When lots of people are actively using a company’s products or services, it indicates strong brand loyalty and long-term growth potential.

Trainline is Europe’s most downloaded rail app, enabling millions of travellers to search and book their rail (and coach) journeys. And it’s growing strongly.

A growth platform

In the six months to the end of August, net ticket sales increased 14% year on year to £3bn. The company takes a commission on ticket sales, and this saw revenue rise 17% at constant currency to £229m.

The company’s profits also growing rapidly in the first half. Operating profit surged 117% to £49m, while basic earnings per share of 7.5p was a whopping 160% higher.

Trainline now has 12m monthly active users in the UK. However, it’s also growing quickly in parts of Europe, where there’s an increasing number of new private rail operators.

Combined net ticket sales grew 23% across Spain and Italy, and the firm has more than doubled its share across aggregated Spanish routes in the past two years. On the Madrid-Valencia route, the app now accounts for one out of every six transactions.

This growth allowed Trainline to improved its full-year guidance. It now eyes revenue growth of 11%-13%, up from a previously expected 7%-11%, and adjusted EBITDA of around 2.6% of net ticket sales (up from 2.4%-2.5%).

Will I buy Trainline stock?

With the ongoing shift from paper to digital tickets, Trainline puts the market opportunity at €55bn.

However, a huge market opportunity brings lots of competition. And I’m worried about Uber‘s aggressive foray into the e-ticketing arena. For every booking, it’s offering 10% of the value back in credits that can be used on either food (Uber Eats) or taxi rides.

If I can book a train ticket through Uber then get a 10% discount on one of its taxi rides on arrival, I’ll probably do that. So this is a direct competitive risk for Trainline.

There’s also the issue of UK rail nationalisation. The new government could cap booking fees to lower fares, affecting Trainline’s earnings.

The stock’s also pricey at 26 times this year’s forecast earnings. Weighing things up, I’m going to pass in favour of other growth stocks.