Down 21% in 6 months, I expect this FTSE 250 growth share to bounce back!

The FTSE 250 continues to fly as investor appetite for UK-focused shares picks up. At around 21,356 points, the London stock market index is now up 8% since the start of 2024.

Of course, there’s also been some big fallers in recent months. This includes some high-quality companies that — in my opinion — investors have been too hasty in selling off.

Such declines present an excellent investment opportunity for long-term investors like me however. By buying expertly-run businesses at today’s discounted prices, I stand to make stunning returns when (as I expect) they eventually bounce back.

Applying this strategy, here’s a great FTSE 250 share I expect to recover strongly over time and see it as worthy of further research.

Up, but still down

Shares in SSP Group (LSE:SSPG) have taken off in July following a sparkling set of trading numbers. However, over a six-month time horizon the business is still nursing heavy share price losses.

At 176.3p per share, it’s fallen a whopping 21% in total over the period.

SSP operates food and beverage outlets in train stations, airports and other travel locations. Its major brands include baguette vendor Upper Crust and Ritazza coffee shops. The firm also operates franchise outlets for blue-chip brands like Starbucks, McDonalds and Greggs.

Investors heavily sold its shares following May’s half-year trading update. Back then, it said that pre-tax profits had dropped 19% year on year between October and March. This was despite a 15% surge in revenues.

SSP’s bottom line was impacted by industrial action on the French and German railways, along with high levels of renewals in Europe and their related costs. Adverse currency movements didn’t do the firm any favours either.

Problems unwinding

But these pressures are likely to prove temporary, some analysts believe. Indeed, last month’s reassuring update illustrates that SSP may be past the worst and that conditions are improving. Then the company affirmed full-year underlying operating profit target of between £210m and £235m.

SPP said that sales rose 15% during the April to June quarter, up from 12.3% in the prior three-month period. It commented that “led by an increasing demand for leisure travel, we have seen a strong sales performance across all regions“.

A fresh economic downturn could scupper the company’s progress in recent months. So could a worsening in currency-related effects. But as things stand, the business looks in good shape to capitalise on the peak summer period and to perform strongly thereafter.

A top value stock

City analysts agree with my bullish opinion. For the next two financial years, company earnings are tipped to rise 62% and 32% respectively.

Such forecasts also leave SSP shares looking dirt cheap on paper. A price-to-earnings growth (PEG) ratio of 0.3 for this year, and 0.4 for the following 12 months, fall below the widely regarded bargain benchmark of 1.

Analysts have attached an average 12-month target price of 280.6p per share to SSP. This represents an attractive 60%-plus premium from current levels.

I think the business could enjoy rapid share price growth over the long term too, as it expands internationally to capitalise on the steady rise in traveller numbers.