Travelzoo (TZOO) AI Stock Analysis

• Market Cap: $63.95M
• Dividend Yield: N/A
• Average Volume (3M): 136.61K
• Price to Earnings (P/E): 9.0
• Beta (1Y): 1.06
• Revenue Growth: 6.58%
• EPS Growth: -34.30%
• Country: US
• Employees: 227
• Sector: Communication Services
• Sector Strength: 97
• Industry: Advertising Agencies
• EPS (TTM): 0.01
• Shares Outstanding: 10,932,337
• 10 Day Avg. Volume: 161,086
• 30 Day Avg. Volume: 136,608
• PEG Ratio: 0.61
• Price to Book (P/B): -543.83
• Price to Sales (P/S): 2.99
• P/FCF Ratio: 12.01
• Enterprise Value/Market Cap: 0.97
• Enterprise Value/Revenue: 0.69
• Enterprise Value/Gross Profit: 0.84
• Enterprise Value/Ebitda: 5.34
• 1Y Price Target: $18.00
• Price Target Upside: 210.34% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): 1.16
• Revenue Forecast (FY): $107.12M

• Rating: 55 Neutral
• Price Target: $6.00 ▲(3.45% Upside)

Travelzoo's overall stock score is driven by mixed financial performance and bearish technical indicators. While the company shows potential with revenue and membership growth, significant financial instability and weak market momentum present challenges. The reasonable valuation provides some support, but operational and financial risks weigh heavily on the score.

Positive Factors

Shift to recurring membership revenue

The move toward subscription revenue and rapid member additions materially increases revenue predictability and lifetime value. Recognizing fees over 12 months smooths top-line volatility from advertising, supporting steadier cash flows and more durable margin expansion as membership scales.

High gross margins

A very high gross margin indicates the business has low direct costs and strong pricing power on deals and advertising. That structural margin profile supports scalable growth: incremental revenue largely drops to the bottom line, enabling reinvestment in members or product without proportional COGS increases.

Product differentiation and niche brands

Owned niche products and exclusive supplier offers create durable differentiation and higher-conversion audiences. These assets foster stronger partner relationships, recurring subscription demand and higher affiliate conversion rates, helping diversify revenue beyond commoditized advertising channels.

Negative Factors

Weak balance sheet and negative equity

Persistent negative equity and elevated leverage constrain financial flexibility, raising refinancing and covenant risk. This structural weakness limits the company's ability to absorb shocks, fund member acquisition or product investment without dilutive financing, and increases long-term solvency risk.

Declining cash flow and limited cash reserves

Negative operating cash flow and modest cash balances reduce runway for sustained marketing and international expansion. With free cash flow down materially (TTM decline noted), the company faces persistent funding needs that could force costly financing or cutbacks, impairing long-term execution.

Rising member acquisition costs

Materially higher CAC weakens unit economics and slows payback on marketing spend. Combined with a near-term operating profit decline due to elevated marketing, sustained CAC inflation could prevent memberships from becoming accretive, pressuring margins and free cash flow over the medium term.

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

Travelzoo's financial performance is mixed. While revenue has grown, profitability margins have declined, and the balance sheet shows significant financial instability with negative equity and high leverage. Cash flow generation is moderate, but the decline in free cash flow growth poses a risk.

Income Statement

Travelzoo's income statement shows a moderate performance with a gross profit margin of 82.3% and a net profit margin of 8.8% for the TTM period. While revenue has grown by 2.4% in the TTM, the EBIT and EBITDA margins have decreased compared to the previous year, indicating some pressure on operational efficiency. The company has shown resilience with positive revenue growth, but profitability margins have declined, suggesting potential challenges in cost management.

Balance Sheet

The balance sheet reveals significant weaknesses, with a negative stockholders' equity and a concerning debt-to-equity ratio of -0.81 in the TTM. The return on equity is also negative, indicating that the company is not generating sufficient returns on shareholder investments. The equity ratio is negative, highlighting financial instability and potential risks associated with high leverage.

Cash Flow

Cash flow analysis shows a mixed picture. The operating cash flow to net income ratio is 0.34, indicating moderate cash generation relative to net income. However, free cash flow has decreased by 32.2% in the TTM, suggesting challenges in maintaining cash reserves. The free cash flow to net income ratio is strong at 0.99, indicating efficient cash conversion, but the overall decline in free cash flow growth is a concern.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	89.92M	83.90M	84.48M	70.60M	62.71M	53.60M
Gross Profit	74.03M	73.43M	73.54M	60.60M	51.32M	43.04M
EBITDA	11.61M	19.41M	17.46M	9.75M	505.00K	-8.95M
Net Income	7.94M	13.56M	12.37M	6.63M	911.00K	-13.42M
Balance Sheet
Total Assets	46.16M	54.72M	58.27M	73.59M	101.79M	102.40M
Cash, Cash Equivalents and Short-Term Investments	8.49M	17.06M	15.71M	18.69M	43.81M	63.06M
Total Debt	6.55M	8.12M	9.25M	11.30M	12.29M	18.02M
Total Liabilities	49.25M	50.37M	47.64M	59.98M	101.42M	95.90M
Stockholders Equity	-8.10M	-462.00K	5.94M	9.01M	-4.23M	1.89M
Cash Flow
Free Cash Flow	11.95M	20.92M	10.42M	-24.63M	-8.11M	46.77M
Operating Cash Flow	12.05M	21.10M	10.68M	-23.12M	-8.08M	47.02M
Investing Cash Flow	-97.00K	-177.00K	-39.00K	-1.31M	104.00K	2.07M
Financing Cash Flow	-14.84M	-18.97M	-14.15M	1.28M	-11.16M	-6.98M

Travelzoo Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 5.80
• 50DMA: Negative
• 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 Negative. The current price of 5.8 is below the 20-day moving average (MA) of 6.24, below the 50-day MA of 6.73, and below the 200-day MA of 10.11, indicating a bearish trend. The MACD of -0.32 indicates Negative momentum. The RSI at 36.30 is Neutral, neither overbought nor oversold. The STOCH value of 43.39 is Neutral, 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
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
WIMI	56 Neutral	$48.37M	1.89	15.20%	―	-27.98%	―
TZOO	55 Neutral	$63.95M	8.96	―	―	6.58%	-34.30%
MCHX	55 Neutral	$72.01M	-14.77	-14.61%	―	-4.32%	-13.99%
FLNT	52 Neutral	$112.02M	-3.30	-127.41%	―	-18.94%	37.05%
VSME	31 Underperform	$4.87M	-1.18	-194.72%	―	-11.51%	74.52%