UPDATE: Benchmark Initiates Travelzoo At Buy, $54 PT

Benchmark has published a research report on Travelzoo, Inc. TZOO and has initiated coverage with a Buy rating.

In the report, Benchmark writes "Travelzoo should sustain mid-teens growth in its core travel advertising business aided by steady travel supplier demand to promote travel deals while its local deals could blossom, enhancing margins and driving EPS growth. We project Travelzoo could show 18% y/y revenue growth to $133 million and EPS of $1.20 for 2011 as it expands its subscribers and local deal offerings. For full-year 2011, we estimate revenue of $133 million, up 18% y/y. EBITDA could be $35 million, up about 30% y/y. EPS could be $1.20, with free cash flow of $23 million or $1.40 per share."

Benchmark has also issued a $54 price target on Travelzoo, which closed yesterday at $45.01.