Travelzoo (TZOO) AI Stock Analysis

• Market Cap: $60.46M
• Dividend Yield: N/A
• Average Volume (3M): 184.40K
• Price to Earnings (P/E): 16.3
• Beta (1Y): 1.12
• Revenue Growth: 6.58%
• EPS Growth: -34.30%
• Country: US
• Employees: 227
• Sector: Communication Services
• Sector Strength: 97
• Industry: Advertising Agencies
• EPS (TTM): 0.00
• Shares Outstanding: 10,932,337
• 10 Day Avg. Volume: 204,845
• 30 Day Avg. Volume: 184,395
• PEG Ratio: -0.28
• Price to Book (P/B): -10.59
• Price to Sales (P/S): 0.87
• P/FCF Ratio: 14.22
• Enterprise Value/Market Cap: 1.15
• Enterprise Value/Revenue: 0.76
• Enterprise Value/Gross Profit: 0.95
• Enterprise Value/Ebitda: 9.52
• 1Y Price Target: $14.00
• Price Target Upside: 112.12% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): 0.77
• Revenue Forecast (FY): $101.43M

• Rating: 56 Neutral
• Price Target: $6.50 ▼(-1.52% Downside)
• Action: Reiterated Date: 02/26/26
• Date: Action: Reiterated 02/26/26

The score is held back primarily by balance-sheet weakness (negative equity) and the 2025 step-down in profitability and free cash flow despite strong revenue growth. Offsetting factors include solid gross economics and a strategy shift toward expanding recurring membership-fee revenue, while technicals show only a short-term rebound within a longer-term downtrend and valuation appears moderate (P/E ~16).

Positive Factors

High Gross Margins

Travelzoo’s ~80%+ gross margins reflect a low‑cost, digital media model with strong unit economics. Durable high gross margins provide operating leverage as revenue grows, enabling the company to invest in member acquisition and product launches while preserving the ability to restore operating profitability over the next 2–6 months.

Recurring Revenue & Membership Ramp

A rapid Club Member build (180% YTD) and a plan for membership fees to become ~25% of revenue shift the business toward predictable, ratable subscription income. This structural mix change reduces reliance on volatile advertising/commerce and supports steadier top‑line visibility and LTV-driven economics over a multi‑quarter horizon.

Positive Cash Balance & Operating Cash Flow

A cash balance of $10.8M and positive Q4 operating cash flow give Travelzoo short‑term liquidity to fund member acquisition and product rollouts (e.g., Travelzoo META). This cash cushion supports strategic reinvestment without immediate capital raises, helping execution on the recurring‑revenue transition over coming quarters.

Negative Factors

Negative Shareholders' Equity

Negative equity materially weakens financial flexibility and raises the cost and complexity of raising capital. It limits conventional leverage analytics, can constrain strategic options during downturns, and increases creditor and investor scrutiny—an enduring balance‑sheet headwind for several quarters.

Profitability Compression

A sharp decline in net margin signals that increased member‑acquisition and other costs are materially compressing earnings. If management persists with aggressive acquisition spending to scale subscriptions, near‑term margin recovery may be delayed, keeping operating profitability weak across multiple reporting periods.

Cash‑Flow Volatility

Historic swings in operating cash flow and a >50% drop in free cash flow reduce predictability of internal funding for growth. Elevated cash‑flow volatility heightens refinancing and liquidity risk if acquisition spend continues, making cash management and timing of member renewals critical over the next several quarters.

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 and affiliate marketing. The company partners with travel and entertainment providers to offer exclusive deals to its subscribers, earning commissions on bookings made through its platform. Key revenue streams include the sale of advertising space on its website and email newsletters, as well as performance-based commissions from partners for each transaction facilitated via Travelzoo. Additionally, Travelzoo may generate income through partnerships with local businesses that seek to promote their services to a broad audience of travelers. The company leverages its large subscriber base to attract advertisers and partners, enhancing its earnings potential.

Travelzoo Financial Statement Overview

Summary

Strong multi-year turnaround with consistently high gross margins (~80%+) and sustained profitability since 2022, but 2025 showed clear deterioration: net margin fell sharply (~16% to ~5%), operating profitability compressed, and free cash flow dropped materially. The biggest financial risk is balance-sheet quality—stockholders’ equity is negative (2024–2025) alongside a shrinking asset base, reducing financial flexibility despite modest absolute debt.

Income Statement

Profitability has improved materially versus 2020–2021, with the business now consistently profitable (2022–2025). Revenue nearly doubled in 2025 (annual) versus 2024, and gross margins remain very strong (~80%+). However, earnings quality weakened in 2025 as net margin fell to ~5% from ~16% in 2024 and operating profitability also compressed, signaling either higher costs, reinvestment, or one-time pressures. Overall: strong gross economics and solid multi-year turnaround, but the most recent year shows notable margin deterioration.

Balance Sheet

Leverage is not extreme in absolute dollars (total debt ~ $6.0M in 2025), but the capital structure is a key concern: stockholders’ equity turned negative in 2024–2025, which weakens financial flexibility and makes traditional leverage measures less meaningful. Assets declined from 2023 to 2025, and negative equity also drives negative returns on equity despite positive net income. Overall: manageable debt load, but negative equity and shrinking asset base are meaningful balance-sheet risks.

Cash Flow

Cash generation is generally supportive of reported earnings, with free cash flow closely tracking net income in most years (including 2024–2025). That said, cash flow volatility is elevated: operating cash flow swung sharply negative in 2021–2022 and then rebounded strongly in 2023–2024 before dropping again in 2025 (operating cash flow down substantially year over year, with free cash flow down over 50%). Overall: decent conversion of earnings to free cash flow, but the year-to-year stability of cash generation is a concern.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	91.72M	83.90M	84.48M	70.60M	62.71M
Gross Profit	73.64M	73.43M	73.54M	60.60M	51.32M
EBITDA	7.96M	19.41M	17.46M	9.75M	505.00K
Net Income	4.70M	13.56M	12.37M	6.63M	911.00K
Balance Sheet
Total Assets	45.11M	54.72M	58.27M	73.59M	101.79M
Cash, Cash Equivalents and Short-Term Investments	10.01M	17.06M	15.71M	18.69M	43.81M
Total Debt	10.18M	8.12M	9.25M	11.30M	12.29M
Total Liabilities	47.53M	50.37M	47.64M	59.98M	101.42M
Stockholders Equity	-7.51M	-462.00K	5.94M	9.01M	-4.23M
Cash Flow
Free Cash Flow	5.60M	20.92M	10.42M	-24.63M	-8.11M
Operating Cash Flow	5.66M	21.10M	10.68M	-23.12M	-8.08M
Investing Cash Flow	-65.00K	-177.00K	-39.00K	-1.31M	104.00K
Financing Cash Flow	-13.07M	-18.97M	-14.15M	1.28M	-11.16M

Travelzoo Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 6.60
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TZOO, the sentiment is Neutral. The current price of 6.6 is above the 20-day moving average (MA) of 5.59, above the 50-day MA of 6.25, and below the 200-day MA of 9.45, indicating a neutral trend. The MACD of -0.15 indicates Negative momentum. The RSI at 60.19 is Neutral, neither overbought nor oversold. The STOCH value of 83.16 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TZOO.

Travelzoo Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
WIMI	56 Neutral	$41.02M	1.81	15.20%	―	-27.98%	―
TZOO	56 Neutral	$60.46M	16.25	―	―	6.58%	-34.30%
MCHX	55 Neutral	$64.98M	-13.78	-14.61%	―	-4.32%	-13.99%
FLNT	52 Neutral	$101.06M	-2.83	-127.41%	―	-18.94%	37.05%
VSME	31 Underperform	$3.33M	-1.23	-194.72%	―	-11.51%	74.52%

Travelzoo Corporate Events

Travelzoo Posts Q4 Revenue Growth Amid Investment Phase

Travelzoo reported fourth-quarter 2025 revenue of $22.5 million, a 9% year-over-year increase, with constant-currency growth of 7%, while consolidated operating profit reached $0.6 million and non-GAAP operating profit $0.9 million. Despite a net loss attributable to Travelzoo of $19,000, or $0.00 per share, cash flow from operations was $1.5 million and results were weighed down by immediately expensed marketing aimed at accelerating paid Club Member acquisition and by membership fees recognized over 12 months.

North America revenue rose 6% to $14.8 million with operating margin compressing to 10%, while Europe revenue climbed 16% to $6.3 million but swung to a $1 million operating loss due to increased member acquisition spending. Jack’s Flight Club, of which Travelzoo owns 60%, delivered modest growth with $1.3 million in revenue and slightly higher operating profit, and newer initiatives such as licensing and Travelzoo META remained small, with licensing in Australia and Japan contributing $15,000 in revenue in the quarter.

As of December 31, 2025, the company held $10.8 million in cash, cash equivalents and restricted cash, and reported higher deferred revenue tied to the shift toward subscription-based membership fees recognized ratably. Management emphasized leveraging Travelzoo’s brand, global reach and supplier relationships to expand Club Offers and benefits, framing current earnings pressure as an investment phase to build a recurring membership-fee base that is expected to support stronger profitability over time.

The most recent analyst rating on (TZOO) stock is a Hold with a $6.00 price target. To see the full list of analyst forecasts on Travelzoo stock, see the TZOO Stock Forecast page.