Expect Travelzoo To 'Reinvigorate' Its Business Model, Analyst Says

  • Barrington Research reiterated a Market Perform rating on the shares of Travelzoo TZOO after the fourth-quarter earnings result.
  • Revenues of $18.6 million in Q4 were in line with the analyst’s $18.5 million estimate that had been raised following the company’s updating its guidance in mid-December.
  • Travelzoo expects Q1 revenue to continue to grow and show improved profitability, with confidence in its ability to maintain control over expense growth, said the analyst.
  • Management asserted that a positive byproduct of its COVID era challenge was an opportunity to reduce fixed costs, which it feels it was able to execute successfully, creating an opportunity to run its business in a more lean fashion coming out of the pandemic.
  • Travel demand, in the U.S. particularly, has remained elevated, which may be limiting the overall path of revenue growth, but lowering travel restrictions generally, should continue to facilitate a path back to pre-pandemic revenues, noted the analyst.
  • During Q4, domestic revenues grew 53% while Europe revenues increased 23%, indicating that North American trends are outpacing Europe, added the analyst.
  • Jack’s Flight Club continues to lag the analyst’s earlier expectations. However, it may well offer the type of opportunity originally envisioned as travel interest regains momentum.
  • Travelzoo Meta, a subscription-based metaverse travel opportunity, remains in the early stages at this point, remarked the analyst.
  • The analyst expects Travelzoo to reinvigorate its business model and benefit from new initiatives.
  • Price Action: TZOO shares are trading higher by 0.85% at $5.32 on the last check Thursday.
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