Travelzoo (TZOO) AI Stock Analysis

• Market Cap: $142.79M
• Dividend Yield: N/A
• Average Volume (3M): 122.86K
• Price to Earnings (P/E): 12.9
• Beta (1Y): 0.69
• Revenue Growth: 0.23%
• EPS Growth: 17.13%
• Country: US
• Employees: 227
• Sector: Communication Services
• Sector Strength: 89
• Industry: Advertising Agencies
• EPS (TTM): 0.25
• Shares Outstanding: 11,095,078
• 10 Day Avg. Volume: 65,756
• 30 Day Avg. Volume: 122,862
• PEG Ratio: -2.97
• Price to Book (P/B): -27.66
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 8.41
• Enterprise Value/Market Cap: 1.13
• Enterprise Value/Revenue: 0.48
• Enterprise Value/Gross Profit: 2.21
• Enterprise Value/Ebitda: 2.18
• 1Y Price Target: $23.00
• Price Target Upside: 78.71% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3

• Rating: 61 Neutral
• Price Target: $14.00 ▲( 8.78% Upside)

Travelzoo scores moderately due to strong profitability and cash flow generation, offset by significant balance sheet concerns with negative equity. Technical analysis shows mixed signals, and while the valuation appears attractive, the lack of a dividend could limit appeal. The earnings call suggests a cautiously optimistic future, with anticipated revenue growth but challenges in European operations.

Positive Factors

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

Profit Margins

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

Revenue Shortfall

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, 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 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 exhibits strong profitability with high gross and net profit margins and consistent revenue growth. However, the balance sheet shows negative equity, indicating potential financial distress, which is a significant concern. The cash flow is strong with healthy free cash flow, but past volatility and high financing outflows are notable risks.

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
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
85.06M	83.90M	84.48M	70.60M	63.19M	53.60M
	Gross Profit
73.06M	73.43M	73.54M	60.60M	51.66M	43.04M
	EBIT
16.65M	18.50M	15.57M	7.56M	-972.00K	-11.15M
	EBITDA
17.00M	19.41M	17.46M	9.75M	507.00K	-8.95M
	Net Income Common Stockholders
12.34M	13.56M	12.37M	6.63M	911.00K	-11.18M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
16.19M	17.06M	15.71M	18.69M	43.81M	63.06M
	Total Assets
56.49M	54.72M	55.38M	67.27M	100.08M	102.40M
	Total Debt
8.92M	8.12M	9.25M	11.30M	12.29M	18.02M
	Net Debt
-7.27M	-8.95M	-6.47M	-7.39M	-31.52M	-45.04M
	Total Liabilities
45.94M	50.37M	46.50M	58.42M	99.45M	95.90M
	Stockholders Equity
5.86M	-462.00K	4.19M	4.26M	-3.98M	1.89M
Cash Flow		Free Cash Flow
19.60M	20.92M	10.42M	-24.63M	-8.11M	46.56M
	Operating Cash Flow
19.76M	21.10M	10.68M	-23.12M	-8.08M	46.82M
	Investing Cash Flow
-163.00K	-177.00K	-39.00K	-1.31M	104.00K	2.07M
	Financing Cash Flow
-24.02M	-18.97M	-14.15M	1.28M	-11.16M	-6.78M

Travelzoo Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 12.87
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TZOO, the sentiment is Negative. The current price of 12.87 is below the 20-day moving average (MA) of 13.92, below the 50-day MA of 13.39, and below the 200-day MA of 15.76, indicating a bearish trend. The MACD of -0.09 indicates Positive momentum. The RSI at 43.49 is Neutral, neither overbought nor oversold. The STOCH value of 2.35 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TZOO.

Travelzoo Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DLX	71 Outperform	$610.25M	10.94	9.10%	8.80%	-2.69%	61.73%
QNST	62 Neutral	$849.72M	―	-0.29%	―	88.81%	99.16%
TZOO	61 Neutral	$142.79M	12.87	494.69%	―	0.23%	17.13%
Sector *	60 Neutral	$14.12B	6.43	-3.56%	3.69%	2.49%	-35.43%
MCHX	55 Neutral	$73.32M	―	-16.55%	―	-2.67%	21.65%
TSQ	50 Neutral	$110.70M	―	74.55%	11.71%	-0.16%	57.03%
CDLX	42 Neutral	$96.60M	―	-135.48%	―	-12.77%	19.71%

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.

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.