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1. Company Snapshot

1.a. 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.

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1.b. Last Insights on TZOO

Travelzoo's recent performance was negatively impacted by worsening economics, driven by its new membership model. The company's Q3 2025 earnings missed estimates, with revenue growth of 10% year-over-year, but operating margins continued to deteriorate. Higher customer acquisition costs and low margins in the membership business raised concerns. Significant insider selling by the largest shareholder and ongoing share repurchases, which can be seen as a positive event as it reduces the number of outstanding shares, sparked worries about confidence in the company's future prospects.

1.c. Company Highlights

2. Travelzoo's Q3 Earnings: Revenue Growth Continues, But Profitability Remains a Concern

Travelzoo reported consolidated Q3 revenue of $22.2 million, a 10% increase from the prior year, with operating income decreasing to $0.5 million or 2% of revenue. The company's earnings per share (EPS) came in at $0.01, significantly lower than analyst estimates of $0.14. Despite the revenue growth, the company's profitability was impacted by increased investment in growing its Club Members base, with an average acquisition cost of $40 in Q3. Membership fees revenue increased to $3.6 million and is expected to account for about 25% of revenue next year.

Publication Date: Nov -24

📋 Highlights

Revenue Growth Drivers

Revenue growth came from all reporting segments, with Jack's Flight Club revenue increasing 12%. The company acquired 135% more Club Members year-to-date, with new members coming roughly half from Legacy Members and half from those new to Travelzoo. Management believes the investments in Club Members have a favorable ROI and will drive future growth. The company's focus is on retaining club members by providing valuable content and information to ensure they see the benefits of their membership and choose to renew.

Valuation and Outlook

Analysts estimate next year's revenue growth at 16.4%. With a current P/S Ratio of 0.85, the market appears to have moderate expectations for the company's revenue growth. Additionally, the company's EV/EBITDA ratio is 6.39, indicating a relatively reasonable valuation. Travelzoo's management remains optimistic about its prospects, with a strong focus on providing excellent opportunities and offers to its members. The company's membership model is well-positioned to provide value to its target audience of affluent travelers.

Future Growth Prospects

Travelzoo's META and Jack's Flight Club continue to be developed, with premium subscribers increasing 8%. The company is considering increasing membership fees in certain markets, as the current $40 fee seems too low. With a strong cash position of $9.2 million in cash, cash equivalents, and restricted cash, the company is well-positioned to invest in growth initiatives. The company's repurchase of 148,602 shares also demonstrates its commitment to returning value to shareholders.

Challenges and Risks

The travel environment is showing no significant changes, with consumers seeking value and amazing offers. However, the company may face capacity issues at airport lounges if flight cancellations increase. Travel suppliers are focused on keeping occupancy rates high, and if they struggle to fill rooms, they may create offers for Travelzoo, allowing the company to provide more value to its members. Overall, the company remains optimistic about its prospects, with a strong focus on providing excellent opportunities and offers to its members.

3. NewsRoom

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Club Offers for Travel Enthusiasts in the UK

Dec -03

Source: prnewswire.com

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Club Offers for Travel Enthusiasts in Canada

Dec -02

Source: prnewswire.com

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Club Offers for Travel Enthusiasts in the UK

Nov -26

Source: prnewswire.com

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Club Offers for Travel Enthusiasts in the U.S.

Nov -25

Source: prnewswire.com

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Analysts Set Travelzoo (NASDAQ:TZOO) PT at $19.67

Nov -25

Source: defenseworld.net

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Club Offers for Travel Enthusiasts in Canada

Nov -09

Source: prnewswire.com

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Club Offers for Travel Enthusiasts in the U.S.

Nov -02

Source: prnewswire.com

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Club Offers for Travel Enthusiasts in the UK

Nov -02

Source: prnewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.76%)

6. Segments

Travelzoo North America

Expected Growth: 7%

Travelzoo North America's 7% growth driven by increasing online travel bookings, rising demand for experiences over material goods, and effective email marketing campaigns targeting high-intent travelers. Additionally, the company's strong brand recognition, user-friendly website, and mobile app contribute to its growth.

Travelzoo Europe

Expected Growth: 6%

Travelzoo Europe's 6% growth is driven by increasing online travel bookings, rising demand for experiential travel, and strategic partnerships with travel suppliers. Additionally, the company's focus on mobile optimization, personalized travel recommendations, and loyalty programs contribute to its growth momentum.

Jack's Flight Club

Expected Growth: 8%

Jack's Flight Club from Travelzoo's 8% growth is driven by increasing demand for affordable travel, strategic partnerships with airlines, and effective email marketing campaigns. Additionally, the club's exclusive deals and personalized travel recommendations contribute to its growth, as well as its user-friendly website and mobile app.

New Initiatives

Expected Growth: 9%

Travelzoo's 9% growth driven by new initiatives, including expansion into new markets, increased investment in mobile app development, and strategic partnerships with travel industry leaders. Additionally, enhanced user experience, improved search functionality, and targeted marketing campaigns have contributed to the growth.

7. Detailed Products

Travelzoo Top 20

A weekly newsletter featuring the top 20 travel deals curated by Travelzoo's team of experts

Local Deals

Exclusive deals on experiences and activities in over 100 cities worldwide

Travelzoo Search

A travel search engine that allows users to compare prices on flights, hotels, and package deals

Newsflash

A daily email featuring last-minute travel deals and error fares

Travelzoo Hotel Search

A hotel search engine that allows users to compare prices and find deals on accommodations

Travelzoo Getaway

A travel booking platform that offers exclusive deals on vacation packages

8. Travelzoo's Porter Forces

Forces Ranking

Threat Of Substitutes

Travelzoo's deals are often unique and exclusive, making it difficult for customers to find substitutes. However, customers may still choose to book directly with travel providers or use other travel deal platforms.

Bargaining Power Of Customers

Individual customers have limited bargaining power due to Travelzoo's large customer base and the company's ability to negotiate exclusive deals with travel providers.

Bargaining Power Of Suppliers

Travel providers have some bargaining power due to their ability to negotiate contracts and set prices. However, Travelzoo's large customer base and exclusive deals give the company some leverage in negotiations.

Threat Of New Entrants

The online travel deal market is highly competitive, and new entrants can easily enter the market. Travelzoo must continually innovate and improve its offerings to stay ahead of competitors.

Intensity Of Rivalry

The online travel deal market is highly competitive, with many established players and new entrants vying for market share. Travelzoo must continually innovate and improve its offerings to stay ahead of competitors.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 60.89%
Debt Cost 3.95%
Equity Weight 39.11%
Equity Cost 12.27%
WACC 7.20%
Leverage 155.70%

11. Quality Control: Travelzoo passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Travelzoo

A-Score: 4.5/10

Value: 8.6

Growth: 6.3

Quality: 7.5

Yield: 0.0

Momentum: 2.0

Volatility: 2.3

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Value: 3.2

Growth: 4.7

Quality: 4.6

Yield: 0.0

Momentum: 9.0

Volatility: 0.7

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Clear Channel Outdoor

A-Score: 3.5/10

Value: 6.8

Growth: 2.8

Quality: 4.1

Yield: 0.0

Momentum: 5.0

Volatility: 2.3

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Direct Digital Holdings

A-Score: 3.4/10

Value: 10.0

Growth: 3.0

Quality: 5.4

Yield: 0.0

Momentum: 1.5

Volatility: 0.3

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AdTheorent Holding Company

A-Score: 2.9/10

Value: 4.2

Growth: 2.0

Quality: 4.6

Yield: 0.0

Momentum: 5.0

Volatility: 1.3

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Cardlytics

A-Score: 2.7/10

Value: 8.8

Growth: 3.0

Quality: 3.4

Yield: 0.0

Momentum: 1.0

Volatility: 0.0

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

6.86$

Current Price

6.86$

Potential

-0.00%

Expected Cash-Flows