| Stock (Symbol) | Stock Price | |
Travelzoo (TZOO) |
$30 |
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| Data is as of | Expected to Report | Sector |
November 16, 2011 |
Feb 3 |
Retail & Travel |
| Sharek’s Take | ||
Travelzoo’s Local Deals program has lost steam. Local Deals is Travelzoo’s Groupon-type discount offering for restaurants. Early in 2011 this program was working great, I was getting good discounts for restaurants here in NYC. Travelzoo is better than Groupon for businesses because it takes 30-40% of the revenue per deal as opposed to Groupon’s 50% cut. I’m not getting any Travelzoo Local Deals anymore, competition for this stuff is everywhere but TZOO should push this more. |
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| One-Year Chart | ||
 The one-year chart look sick. TZOO spiked twice in 2011 and then crashed hard as the company missed estimates and the stock market got weak. People shed their portfolios of volatile stocks like TZOO. Now, at 17 times earnings, the stock is cheap.The estimated Long Term Growth Rate fell from 30% last quarter to 17% this quarter. I think TZOO is closer to a 30% grower than a 17% one. |
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| Earnings Table | ||
 TZOO’s profits jumped 64% last quarter as sales grew 40%, up from 34% 2QtrsAgo and 30% 3QtrsAgo. North American revenue grew 32% and Euopean revenue grew 65%. Europe is where the growth is. What sucks is TZOO has missed estimates each of the last two quarters.Annual profit estimates have also fallen twice in the last two quarters. No wonder the stock is weak. Still, 25% growth is expected next year.Quarterly estimates are on the decline too — but still look good. |
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| Fair Value | ||
 I know estimates are falling, but that should eventually stop. I think TZOO is worth 30 times earnings, this stock is significantly undervalued. Give it time. |
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| Ten-Year Chart | ||
 TZOO’s made two wicked moves up in the past decade. Still, with a record $1.38 in profits expected this year the stock should be a lot higher than it is now. This stock needs to gain some traction. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
19 of 20 |
Travelzoo stock is just sitting there now. This is a long-term investment as Europe growth should accelerate in 2011 with the help of the invesmtnets made there in 2010. In my Power Rankings TZOO is ranked 19th of 20 stocks in the Growth Portfolio and 11th of 11 stocks in the Aggressive Growth Portfolio. I like this company and this stock, but the downward trend of earnings estimates is keeping investors away. |
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Aggressive Growth Portfolio
11 of 11 |
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