Earnings Report: Travelzoo Missed Revenue Estimates By 7.3%

Travelzoo (NASDAQ:TZOO) shareholders are probably feeling a little disappointed, since its shares fell 5.9% to US$8.50 in the week after its latest quarterly results. Results look mixed - while revenue fell marginally short of analyst estimates at US$22m, statutory earnings beat expectations 4.5%, with Travelzoo reporting profits of US$0.31 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Travelzoo

After the latest results, the twin analysts covering Travelzoo are now predicting revenues of US$88.2m in 2024. If met, this would reflect a modest 3.9% improvement in revenue compared to the last 12 months. Per-share earnings are expected to rise 5.6% to US$1.00. Before this earnings report, the analysts had been forecasting revenues of US$92.2m and earnings per share (EPS) of US$1.03 in 2024. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the minor downgrade to earnings per share expectations.

The analysts made no major changes to their price target of US$14.67, suggesting the downgrades are not expected to have a long-term impact on Travelzoo's valuation.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Travelzoo's past performance and to peers in the same industry. One thing stands out from these estimates, which is that Travelzoo is forecast to grow faster in the future than it has in the past, with revenues expected to display 5.3% annualised growth until the end of 2024. If achieved, this would be a much better result than the 6.3% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 9.7% annually for the foreseeable future. So although Travelzoo's revenue growth is expected to improve, it is still expected to grow slower than the industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$14.67, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2026, which can be seen for free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Travelzoo , and understanding it should be part of your investment process.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.