TZOO: Subscriber Momentum Will Drive Paid Membership Upside After Forecast Reset

Analysts have trimmed their price target on Travelzoo to approximately $22 per share from about $24 previously, citing reduced 2025 and 2026 forecasts following softer Q3 results, while maintaining confidence in subscriber driven growth over the longer term.

Analyst Commentary

Recent Street research reflects a recalibration of expectations for Travelzoo, with lower price targets and revised forecasts for 2025 and 2026 following softer than anticipated Q3 results. However, the overall stance remains constructive, with analysts still anticipating meaningful upside if management executes on growth initiatives and monetizes its expanding subscriber base.

Bullish Takeaways

• Bullish analysts continue to see upside to valuation, even after trimming price targets to the low 20s. They argue that current levels do not fully reflect the company’s long term earnings power.
• Subscriber growth is viewed as the primary driver of a stronger 2026. Expectations are that a larger, more engaged audience will support higher advertising revenue and improved deal economics.
• Revised 2025 estimates are framed as a reset rather than a structural downgrade. Analysts expect the company to regain growth momentum as travel demand normalizes and marketing efficiency improves.
• Over the longer term, analysts believe Travelzoo’s asset light model and operating leverage can support margin expansion. This is seen as a potential catalyst for multiple re rating as execution improves.

Bearish Takeaways

• Bearish analysts highlight that the downward revisions to 2025 and 2026 forecasts increase execution risk, particularly if subscriber monetization does not accelerate as expected.
• There is concern that softer Q3 performance may signal a more volatile earnings trajectory. This could cap near term valuation multiples despite the company’s growth potential.
• Some analysts worry that the gap between subscriber growth and revenue growth remains too wide, raising questions around pricing power and the efficiency of Travelzoo’s sales and marketing funnel.
• Lowered price targets reflect caution that competitive pressures in the online travel and deals space could limit Travelzoo’s ability to sustain premium growth and margin expansion.

What's in the News

• Noble Capital lowered its Travelzoo price target to $21 from $26 and maintained an Outperform rating after softer than expected Q3 results and a downwardly revised 2026 forecast (Periodicals).
• Travelzoo issued guidance for the fourth quarter of 2025, expecting continued year over year revenue growth and accelerating revenue trends as more members transition to paid Club memberships, with profitability projected to substantially increase over time (Key Developments).
• The company completed a 1,000,000 share repurchase program, buying back 8.61% of its shares for $14.55 million, including 148,602 shares in the latest quarter for $1.59 million (Key Developments).
• New Club Offers were launched across the U.S., UK and Canada, featuring discounted packages on international vacations, spa experiences and regional getaways, aimed at deepening engagement and monetization of Travelzoo Club Members (Key Developments).

Valuation Changes

• Fair Value Estimate remains unchanged at approximately $22.25 per share, indicating no material shift in the modeled intrinsic value.
• The discount rate edged down slightly from about 8.47% to roughly 8.45%, implying a marginally lower perceived risk profile or cost of capital.
• Revenue growth is effectively unchanged at around 7.02% annually, suggesting stable expectations for top line expansion.
• Net profit margin remains essentially flat at roughly 10.17%, signaling no meaningful revision to long term profitability assumptions.
• The future P/E nudged down slightly from about 25.32x to approximately 25.30x, reflecting a minimal moderation in forward valuation multiples.