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Travelzoo Inc (TZOO)
NASDAQ:TZOO
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Travelzoo (TZOO) AI Stock Analysis

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TZOO

Travelzoo

(NASDAQ:TZOO)

Rating:61Neutral
Price Target:
$13.00
▲(20.37%Upside)
Travelzoo's overall stock score reflects its solid profitability and cash flow capabilities, offset by significant balance sheet risks and bearish technical indicators. Positive earnings call highlights and recent corporate events suggest future growth potential, yet financial stability remains a concern.
Positive Factors
Advertising Revenue
The high intent member base can be attractive to advertisers, contributing to revenue growth.
Revenue Growth
Revenue growth is driven by subscriber additions, with expectations for continued double-digit growth.
Stock Buyback
Travelzoo has been active in repurchasing shares, buying back $18.9 million in stock in 2024.
Negative Factors
Gross Margins
Lower gross margins are due to inventory taken from travel suppliers, indicating greater price sensitivity among consumers.
Marketing Costs
Higher marketing costs associated with subscriber acquisition are pressuring EBITDA.
Profitability Pressure
Elevated sales and marketing investment to add subscribers is expected to weigh on profitability.

Travelzoo (TZOO) vs. SPDR S&P 500 ETF (SPY)

Travelzoo Business Overview & Revenue Model

Company DescriptionTravelzoo (TZOO) is a global internet media company that specializes in publishing travel, entertainment, and local deals. It operates in sectors including online media, advertising, and travel services. The company's core products and services include publishing exclusive travel deals, discounts, and offers from over 5,000 travel, entertainment, and local companies to its subscribers across North America, Europe, and the Asia Pacific.
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:Jul 23, 2025
(Q1-2025)
|
% Change Since: -21.17%|
Next Earnings Date:Oct 22, 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 margins and positive revenue growth, but significant balance sheet concerns due to negative equity and high leverage pose financial stability risks.
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.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue83.90M84.48M70.60M62.71M53.60M
Gross Profit73.43M73.54M60.60M51.66M43.04M
EBITDA19.41M17.46M9.95M507.00K-8.95M
Net Income13.56M12.37M6.63M911.00K-13.42M
Balance Sheet
Total Assets54.72M55.38M67.27M99.73M102.40M
Cash, Cash Equivalents and Short-Term Investments17.06M15.71M18.69M43.81M63.06M
Total Debt8.12M9.25M11.30M12.29M18.02M
Total Liabilities50.37M46.50M58.42M99.36M95.90M
Stockholders Equity-462.00K4.19M4.26M-4.23M1.89M
Cash Flow
Free Cash Flow20.92M10.42M-24.63M-8.11M46.77M
Operating Cash Flow21.10M10.68M-23.12M-8.08M47.02M
Investing Cash Flow-177.00K-39.00K-1.31M104.00K2.07M
Financing Cash Flow-18.97M-14.15M1.28M-11.16M-6.98M

Travelzoo Technical Analysis

Technical Analysis Sentiment
Negative
Last Price10.80
Price Trends
50DMA
13.08
Negative
100DMA
13.34
Negative
200DMA
15.89
Negative
Market Momentum
MACD
-0.33
Positive
RSI
31.87
Neutral
STOCH
13.94
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 10.8 is below the 20-day moving average (MA) of 12.98, below the 50-day MA of 13.08, and below the 200-day MA of 15.89, indicating a bearish trend. The MACD of -0.33 indicates Positive momentum. The RSI at 31.87 is Neutral, neither overbought nor oversold. The STOCH value of 13.94 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
72
Outperform
$754.31M13.539.10%7.05%-2.69%61.73%
65
Neutral
$940.28M-0.29%88.81%99.16%
61
Neutral
€3.48B-0.683.90%4.95%5.55%-158.49%
61
Neutral
$123.60M12.45494.69%3.47%-0.61%
61
Neutral
$89.12M-16.55%-2.67%21.65%
60
Neutral
$142.02M-135.48%-12.77%19.71%
58
Neutral
$118.55M74.55%10.86%-0.16%57.03%
* Communication Services Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TZOO
Travelzoo
10.80
0.79
7.89%
DLX
Deluxe
17.03
-5.65
-24.91%
MCHX
Marchex
2.03
0.46
29.30%
QNST
Quinstreet
16.62
-2.10
-11.22%
TSQ
Townsquare Media
7.32
-3.44
-31.97%
CDLX
Cardlytics
2.45
-5.88
-70.59%

Travelzoo Corporate Events

Business Operations and StrategyFinancial Disclosures
Travelzoo Reports 13% Revenue Increase in Q2 2025
Positive
Jul 23, 2025

Travelzoo reported a 13% year-over-year increase in revenue for Q2 2025, reaching $23.9 million, with a consolidated operating profit of $2.1 million. Despite a reduction in earnings per share due to marketing investments, the company saw growth in its North American and European segments and a significant revenue increase in Jack’s Flight Club. Travelzoo continues to expand its membership base and expects future profitability to rise as recurring membership fees are recognized.

The most recent analyst rating on (TZOO) stock is a Buy with a $17.00 price target. To see the full list of analyst forecasts on Travelzoo stock, see the TZOO Stock Forecast page.

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 25, 2025