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Travelzoo Inc (TZOO)
NASDAQ:TZOO

Travelzoo (TZOO) AI Stock Analysis

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Travelzoo

(NASDAQ:TZOO)

Rating:62Neutral
Price Target:
$14.00
▲(5.18%Upside)
Travelzoo's overall stock score reflects its strong profitability and reasonable valuation. However, significant risks arise from its financial stability, with a highly leveraged balance sheet and negative equity. Technical indicators suggest a neutral short-term momentum. The positive revenue outlook from the earnings call provides optimism, but challenges like decreased operating profits and slower growth in Europe temper the overall assessment.
Positive Factors
Advertiser Attraction
The high intent member base can be attractive to advertisers, with 30 million members globally.
Market Confidence
Travelzoo has been active in repurchasing shares, buying back $18.9 million in stock in 2024, indicating confidence in its business model.
Revenue Growth
Revenue trends are improving as subscriber levels grow, with both European and North American segments generating revenue growth.
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 Shortfalls
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 (TZOO) vs. SPDR S&P 500 ETF (SPY)

Travelzoo Business Overview & Revenue Model

Company DescriptionTravelzoo, an Internet media company, provides travel, entertainment, and local deals from travel and entertainment companies, and local businesses in the Asia Pacific, Europe, and North America. Its publications and products include Travelzoo Website; Travelzoo iPhone and Android apps; Travelzoo Top 20 email newsletter; and Newsflash email alert service. The company also operates the Travelzoo Network, a network of third-party Websites that list travel deals published by the company; and Local Deals and Getaway listings, which allow its members to purchase vouchers for deals from local businesses, such as spas, hotels, and restaurants. It serves airlines, hotels, cruise lines, vacations packagers, tour operators, destinations, car rental companies, travel agents, theater and performing arts groups, restaurants, spas, and activity companies. Travelzoo Inc. was founded in 1998 and is headquartered in New York, New York.
How the Company Makes MoneyTravelzoo makes money primarily through advertising fees paid by travel companies, entertainment companies, and local businesses to feature their deals on Travelzoo's platform. The company charges fees to clients for listing their deals, which are then showcased to Travelzoo's extensive audience of subscribers. Additionally, Travelzoo generates revenue through its travel package sales and associated booking fees. Key revenue streams include listing fees, advertising revenues, and commissions on travel bookings. The company also benefits from strategic partnerships with travel and entertainment providers, enhancing its offerings and revenue potential.

Travelzoo Earnings Call Summary

Earnings Call Date:Apr 29, 2025
(Q1-2025)
|
% Change Since: 6.31%|
Next Earnings Date:Jul 24, 2025
Earnings Call Sentiment Neutral
The earnings call presents a mixed picture. While there is notable revenue growth, especially in North America and Jack's Flight Club, and effective member acquisition strategies are in place, the company faces challenges with decreased operating profits and slower growth in Europe. Investments in member growth are expected to yield positive results in the future, but they currently impact margins.
Q1-2025 Updates
Positive Updates
Quarterly Revenue Growth
Travelzoo's consolidated Q1 revenue was $23.1 million, up 5% from the prior year and reaching the highest quarterly revenue since the pandemic. In constant currencies, revenue was $23.3 million, up 6% from the prior year.
Membership Fee Revenue Impact
Revenue per membership fees increased to $2.4 million. Travelzoo introduced a membership fee, converting Legacy Members to Club Members, which is expected to drive significant and incremental revenue growth.
North America Performance
North America segment showed the strongest revenue growth, with the GAAP operating margin at 24% for Q1 2025, despite a decrease due to investments in member growth.
Jack's Flight Club Growth
Revenue increased 20% year-over-year for Jack's Flight Club, with a 13% increase in premium subscribers.
Share Repurchases and Cash Position
Travelzoo repurchased 590,839 shares of the company's outstanding common stock. Consolidated cash, cash equivalents, and restricted cash was $12.2 million as of March 31, 2025.
Negative Updates
Operating Profit Decrease
Q1 operating profit was $3.7 million, a decrease of 34% year-over-year due to investments in member growth.
European Market Performance
Revenue in Europe increased only 1% from the prior year, with the GAAP operating margin remaining flat at 3% for Q1 2025.
Temporary Gross Margin Impact
Gross margins were affected by increased customer service costs and the need to classify certain travel offers as cost of revenue.
Company Guidance
During the Travelzoo First Quarter 2025 Earnings Call, the company provided guidance indicating a positive outlook for future performance. Travelzoo reported consolidated first-quarter revenue of $23.1 million, marking a 5% increase from the prior year, with expectations for year-over-year revenue growth to double in the second quarter of 2025. The company highlighted that membership fees have begun to drive significant incremental revenue growth, contributing $2.4 million in the first quarter. Furthermore, Travelzoo anticipates that as more Legacy Members convert to paid Club Members, recurring membership fee revenue will enhance profitability over time. The call also noted that Travelzoo's GAAP operating margin was 16% for the first quarter, impacted by investments in member growth. Despite these short-term expenses, Travelzoo expects profitability to increase as revenue from membership fees is recognized over the subscription period. Additionally, the company repurchased 590,839 shares, with consolidated cash, cash equivalents, and restricted cash totaling $12.2 million as of March 31, 2025.

Travelzoo Financial Statement Overview

Summary
Travelzoo shows strong profitability with high net profit margins and solid cash flow generation. However, the balance sheet poses concerns due to negative stockholders' equity and high leverage, signaling potential financial distress.
Income Statement
75
Positive
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
40
Negative
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
65
Positive
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue85.06M83.90M84.48M70.60M62.71M53.60M
Gross Profit73.06M73.43M73.54M60.60M51.66M43.04M
EBITDA17.03M19.41M17.46M9.95M507.00K-8.95M
Net Income12.36M13.56M12.37M6.63M911.00K-13.42M
Balance Sheet
Total Assets49.33M54.72M55.38M67.27M99.73M102.40M
Cash, Cash Equivalents and Short-Term Investments11.47M17.06M15.71M18.69M43.81M63.06M
Total Debt7.94M8.12M9.25M11.30M12.29M18.02M
Total Liabilities50.70M50.37M46.50M58.42M99.36M95.90M
Stockholders Equity-6.05M-462.00K4.19M4.26M-4.23M1.89M
Cash Flow
Free Cash Flow19.60M20.92M10.42M-24.63M-8.11M46.77M
Operating Cash Flow19.76M21.10M10.68M-23.12M-8.08M47.02M
Investing Cash Flow-163.00K-177.00K-39.00K-1.31M104.00K2.07M
Financing Cash Flow-24.02M-18.97M-14.15M1.28M-11.16M-6.98M

Travelzoo Technical Analysis

Technical Analysis Sentiment
Positive
Last Price13.31
Price Trends
50DMA
13.40
Negative
100DMA
14.19
Negative
200DMA
15.90
Negative
Market Momentum
MACD
-0.06
Negative
RSI
52.78
Neutral
STOCH
73.72
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 13.31 is above the 20-day moving average (MA) of 12.96, below the 50-day MA of 13.40, and below the 200-day MA of 15.90, indicating a neutral trend. The MACD of -0.06 indicates Negative momentum. The RSI at 52.78 is Neutral, neither overbought nor oversold. The STOCH value of 73.72 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TZOO.

Travelzoo Risk Analysis

Travelzoo disclosed 42 risk factors in its most recent earnings report. Travelzoo reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Travelzoo Peers Comparison

Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
DLDLX
71
Outperform
$767.29M13.769.10%7.00%-2.69%61.73%
65
Neutral
$941.98M-0.29%88.81%99.16%
62
Neutral
$147.68M13.31494.69%0.23%17.13%
61
Neutral
$93.51M-16.55%-2.67%21.65%
58
Neutral
C$3.32B6.33-0.75%6.13%-2.19%-11.60%
TSTSQ
54
Neutral
$135.23M74.55%9.67%-0.16%57.03%
42
Neutral
$97.65M-135.48%-12.77%19.71%
* Communication Services Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TZOO
Travelzoo
13.31
5.75
76.06%
DLX
Deluxe
17.15
-3.39
-16.50%
MCHX
Marchex
2.13
0.71
50.00%
QNST
Quinstreet
16.54
0.25
1.53%
TSQ
Townsquare Media
8.27
-1.67
-16.80%
CDLX
Cardlytics
1.86
-6.35
-77.34%

Travelzoo Corporate Events

Executive/Board ChangesShareholder Meetings
Travelzoo Stockholders Elect Directors at Annual Meeting
Neutral
Jun 4, 2025

At the 2025 Annual Meeting of Stockholders held on June 4, 2025, Travelzoo‘s stockholders elected six directors to the Board, including Holger Bartel and Christina Sindoni Ciocca. Additionally, the stockholders approved the company’s executive compensation on an advisory basis, reflecting continued support for Travelzoo’s leadership and strategic direction.

The most recent analyst rating on (TZOO) stock is a Buy with a $28.00 price target. To see the full list of analyst forecasts on Travelzoo stock, see the TZOO Stock Forecast page.

Stock BuybackFinancial Disclosures
Travelzoo Reports Q1 2025 Financial Results Growth
Positive
Apr 29, 2025

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.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 05, 2025