Barrington analyst Patrick Sholl maintained a Buy rating on Travelzoo today and set a price target of $17.00.
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Patrick Sholl has given his Buy rating due to a combination of factors influencing Travelzoo’s current and future performance. The company has shown promising revenue growth, particularly in the second quarter, which exceeded expectations and demonstrated an upward trend driven by increased subscriber acquisition. This growth is expected to continue into the third quarter, with both the European and North American segments contributing positively.
Additionally, Travelzoo’s large global member base, which includes 30 million members, presents an attractive opportunity for advertisers, despite most members not being paying subscribers. The company’s strategy of offering a free subscription tier to legacy members has helped maintain high reach and engagement. Furthermore, while there are upfront costs associated with subscriber growth, the potential for sourcing attractive deals for members from travel operators remains strong. Despite some pressure on profitability due to increased marketing investments, the overall outlook for revenue growth and business model revitalization supports the Buy rating.
Based on the recent corporate insider activity of 45 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of TZOO in relation to earlier this year.