Reasons For Our Upward Revision Of Travelzoo’s Stock Price Estimate

by Trefis Team
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We recently upgraded Travelzoo’s stock prices by ~30% shortly after the company’s Q2 2016 earnings results. Travelzoo’s transition in its business model with the introduction of a hotel booking platform in 2014, marked the company’s shift of focus from discounted and push-based travel deals to pull or demand-based services. Though the hotel booking platform witnessed lackluster demand initially, it is steadily growing currently and hence, Travelzoo reacquired its Asia Pacific business last year to expand the hotel platform’s reach. Though Travelzoo’s Q2 2016 results followed the previous few quarters’ trend of year-on-year decline in the top line, the company’s bottom line recovered significantly in the same period with a 140% y-o-y increase in net income to $2 million. We believe Travelzoo’s recovery has just begun and the company is going to grow further in the future. With that view in mind we’ve revised some of the important parameters in the Travelzoo model and that, in turn, has resulted in the upgradation of our stock price estimate for Travelzoo.

TZOO Revised Chart

As a result of these revisions, we estimate Travelzoo’s revenues will reach $160 million (as against our old forecast of $149 million) by the end of our review period, reflecting a CAGR of ~1.5% between 2015 to 2023.

Have more questions about Travelzoo? See the links below.

Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Travelzoo

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