Travelzoo (TZOO) AI Stock Analysis

• Market Cap: $159.46M
• Dividend Yield: N/A
• Average Volume (3M): 139.44K
• Price to Earnings (P/E): 14.3
• Beta (1Y): 0.74
• Revenue Growth: 0.23%
• EPS Growth: 15.82%
• Country: US
• Employees: 227
• Sector: Communication Services
• Sector Strength: 83
• Industry: Advertising Agencies
• EPS (TTM): 0.99
• Shares Outstanding: 11,245,137
• 10 Day Avg. Volume: 209,403
• 30 Day Avg. Volume: 139,437
• PEG Ratio: 0.91
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.06
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 2.29
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $23.00
• Price Target Upside: 62.20% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3

Travelzoo shows strong profitability and cash generation capabilities, with a promising outlook for revenue growth. However, significant financial stability concerns due to negative equity and high leverage, coupled with mixed technical indicators, temper the overall score. The attractive valuation provides some upside potential, though the lack of dividends may deter certain investors.

Positive Factors

Advertising Potential

The company has a high intent member base that can be attractive to advertisers, with 30 million members globally.

Revenue Growth

Revenue trends are improving as subscriber levels grow, with both European and North American segments generating revenue growth.

Share Repurchase

Travelzoo has been active in repurchasing shares, buying back $18.9 million in stock in 2024, indicating confidence in its business model.

Negative Factors

Market Challenges

The evolving market for travel advertising presents challenges such as greater price sensitivity and geopolitical concerns from advertisers.

Profit Margin Pressure

Higher upfront costs for subscriber growth are expected to pressure margins and profits in the initial period.

Revenue Miss

Fourth quarter revenues of $20.8 million were below estimates and below the year-ago level, with management having expected growth in the period.

Travelzoo Business Overview & Revenue Model

Company Description

Travelzoo (TZOO) is a global internet media company that publishes exclusive travel, entertainment, and local deals from over 5,000 travel, entertainment, and local companies. The company serves more than 30 million members worldwide, providing them with high-quality travel deals and experiences via its website, newsletters, and mobile applications. Travelzoo operates in the travel and leisure sectors, focusing on delivering curated offers that provide exceptional value to its members.

How the Company Makes Money

Travelzoo generates revenue primarily through advertising fees paid by travel, entertainment, and local businesses that wish to promote their offers to Travelzoo's extensive member base. The company's key revenue streams include listing fees charged to businesses for featuring their deals in Travelzoo's publications and performance-based fees that depend on the success of the promotions. Additionally, Travelzoo leverages partnerships with airlines, hotels, cruise lines, and local businesses to secure exclusive deals that attract users. These partnerships are significant contributors to Travelzoo's earnings, as they enhance the value proposition for its members and drive engagement across its platforms.

Travelzoo Financial Statement Overview

Summary

Travelzoo demonstrates strong profitability with high gross and net profit margins and positive revenue growth. However, significant balance sheet concerns such as negative equity and high leverage pose risks to financial stability. The company shows strong cash generation capabilities, but past volatility and high financing outflows warrant caution.

Income Statement

Travelzoo shows a strong performance in its income statement with improving margins and consistent revenue growth. The TTM gross profit margin is high at 85.9%, indicating effective cost management. The TTM net profit margin improved to 14.5%, demonstrating enhanced profitability. Revenue growth is positive, showing a 1.4% increase over the previous year. However, a slight decline in EBIT and EBITDA margins suggests room for operational efficiency improvements.

Balance Sheet

The balance sheet reveals some concerns with a negative stockholders' equity of -$6.2 million in the TTM period, indicating potential financial distress and high leverage. The debt-to-equity ratio is not applicable due to negative equity, which is a red flag for financial stability. While the equity ratio is negative, indicating liabilities exceed assets, the company does maintain a decent cash position of $11.5 million.

Cash Flow

Cash flow analysis shows strength in operating cash flow, with a TTM figure of $19.8 million, and a robust free cash flow of $19.6 million, illustrating strong cash generation capability. The free cash flow to net income ratio is healthy, indicating efficient conversion of income to cash. However, the volatility in cash flow from previous years and high financing outflows raise concerns about future liquidity.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
83.90M	84.48M	70.60M	63.19M	53.60M
	Gross Profit
73.43M	73.54M	60.60M	51.66M	43.04M
	EBIT
18.50M	15.57M	7.56M	-972.00K	-11.15M
	EBITDA
19.41M	17.46M	9.75M	507.00K	-8.95M
	Net Income Common Stockholders
13.56M	12.37M	6.63M	911.00K	-11.18M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
17.06M	15.71M	18.69M	43.81M	63.06M
	Total Assets
54.72M	55.38M	67.27M	100.08M	102.40M
	Total Debt
8.12M	9.25M	11.30M	12.29M	18.02M
	Net Debt
-8.95M	-6.47M	-7.39M	-31.52M	-45.04M
	Total Liabilities
50.37M	46.50M	58.42M	99.45M	95.90M
	Stockholders Equity
-462.00K	4.19M	4.26M	-3.98M	1.89M
Cash Flow		Free Cash Flow
20.92M	10.42M	-24.63M	-8.11M	46.56M
	Operating Cash Flow
21.10M	10.68M	-23.12M	-8.08M	46.82M
	Investing Cash Flow
-177.00K	-39.00K	-1.31M	104.00K	2.07M
	Financing Cash Flow
-18.97M	-14.15M	1.28M	-11.16M	-6.78M

Travelzoo Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 14.18
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TZOO, the sentiment is Positive. The current price of 14.18 is above the 20-day moving average (MA) of 12.72, above the 50-day MA of 13.82, and below the 200-day MA of 15.42, indicating a neutral trend. The MACD of 0.07 indicates Negative momentum. The RSI at 54.11 is Neutral, neither overbought nor oversold. The STOCH value of 49.85 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TZOO.

Travelzoo Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DLX	68 Neutral	$674.34M	12.78	9.09%	8.13%	-2.69%	―
QNST	68 Neutral	$1.07B	―	-5.52%	―	68.99%	84.85%
TZOO	60 Neutral	$159.46M	14.33	494.69%	―	0.23%	15.82%
Sector *	59 Neutral	$13.76B	7.64	-1.94%	3.86%	2.38%	-36.56%
TSQ	50 Neutral	$113.32M	―	74.55%	11.78%	-0.72%	67.36%
CDLX	41 Neutral	$96.00M	―	-184.87%	―	-10.00%	-11.58%
MCHX	38 Underperform	$65.41M	―	-14.44%	―	-3.58%	50.73%

Travelzoo Corporate Events

Travelzoo Reports Q1 2025 Financial Results Growth

Travelzoo reported its financial results for the first quarter of 2025, showing a 5% increase in revenue to $23.1 million compared to the previous year. The company achieved a consolidated operating profit of $3.7 million and a non-GAAP operating profit of $4.4 million. Travelzoo’s North American segment saw a 6% revenue increase, while its European segment had a 1% increase. Jack’s Flight Club, in which Travelzoo holds a 60% stake, reported a 20% rise in revenue from unaffiliated customers. The company repurchased 590,839 shares during the quarter and expects revenue growth to double in the second quarter of 2025.

Spark’s Take on TZOO Stock

According to Spark, TipRanks’ AI Analyst, TZOO is a Neutral.

Travelzoo demonstrates strong financial performance in terms of profitability and cash flow, which is counterbalanced by concerns regarding its negative equity. The technical indicators point to a bearish trend, but potential reversal opportunities exist. The company’s valuation appears attractive due to its low P/E ratio, but the absence of a dividend might limit investor appeal. The earnings call presents a cautiously optimistic outlook, with initiatives expected to drive future growth despite some regional challenges.

To see Spark’s full report on TZOO stock, click here.

Travelzoo Reports Q4 2024 Financial Results

Travelzoo reported its financial results for Q4 2024, with a revenue of $20.7 million, a slight decrease of 2% year-over-year, but an 8% increase in consolidated operating profit to $4.9 million. The North American segment saw a 1% revenue increase, while the European segment experienced a 13% decline due to fluctuations in Germany. Jack’s Flight Club, in which Travelzoo holds a 60% stake, reported a 19% revenue increase. The company also highlighted its new membership fee structure, which is expected to drive future revenue growth.