UPDATE: The Benchmark Company Reiterates on Travelzoo as Product Headwinds Drive 1Q14 Miss

In a report published Monday, The Benchmark Company analyst Daniel L. Kurnos reiterated a Hold rating on Travelzoo TZOO, but lowered the price target from $25.00 to $20.00. In the report, The Benchmark Company noted, “Travelzoo (TZOO-Hold) reported disappointing 1Q14 results, with revenue of $40.2 million, down 5% y/y, well below our $42.8 million estimate. North America was the primary culprit, with revenue down 12% vs. our expected 1% decline, while Europe outperformed again, up 13% vs. an estimated 8% gain. Management cited a material reduction in vouchered sales of Getaways and Local Deals, partially impacted by the severe weather, along with a pullback in certain Travel advertiser spend similar to 1Q12. "With these headwinds likely to persist at least near-term, we have essentially pushed our 2014 estimates out to 2015 and now forecast a modest revenue decline for 2014. We believe the story has become more reliant on the success of the hotel booking platform, which remains a 2015 event, with any improvements in Search and Local likely to occur in 2H14 at the earliest. We are reducing our price target from $25 to $20 and maintaining our Hold rating.” Travelzoo closed on Thursday at $17.35.