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1. Company Snapshot

1.a. Company Description

Travelzoo, an Internet media company, provides travel, entertainment, and local deals from travel and entertainment companies, and local businesses in the Asia Pacific, Europe, and North America.Its publications and products include Travelzoo Website; Travelzoo iPhone and Android apps; Travelzoo Top 20 email newsletter; and Newsflash email alert service.The company also operates the Travelzoo Network, a network of third-party Websites that list travel deals published by the company; and Local Deals and Getaway listings, which allow its members to purchase vouchers for deals from local businesses, such as spas, hotels, and restaurants.


It serves airlines, hotels, cruise lines, vacations packagers, tour operators, destinations, car rental companies, travel agents, theater and performing arts groups, restaurants, spas, and activity companies.Travelzoo Inc.was founded in 1998 and is headquartered in New York, New York.

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1.b. Last Insights on TZOO

Travelzoo's recent performance was negatively impacted by worsening economics, driven by its new membership model. The company's Q3 2025 earnings missed estimates, with revenue growth of 10% year-over-year, but operating margins continued to deteriorate. Higher customer acquisition costs and low margins in the membership business raised concerns. Significant insider selling by the largest shareholder and ongoing share repurchases, which can be seen as a positive event as it reduces the number of outstanding shares, sparked worries about confidence in the company's future prospects.

1.c. Company Highlights

2. Travelzoo's Q4 2025 Earnings: A Mixed Bag

Travelzoo reported consolidated Q4 revenue of $22.5 million, a 9% increase from the prior year. However, operating income decreased due to increased investments in member acquisition. The average acquisition cost for a full-paying Club Member was $34 in Q4, with a quick payback period. Despite this, reported EPS was impacted by higher member acquisition expenses and revenue recognition, coming in at -$0.00173, relative to estimates at $0.11.

Publication Date: Mar -03

📋 Highlights
  • Revenue Growth:: Consolidated Q4 revenue reached $22.5 million, reflecting a 9% year-over-year increase.
  • Member Acquisition Costs:: Average cost per full-paying Club Member dropped to $34 in Q4, with a quick payback period despite seasonal fluctuations.
  • Membership Expansion:: Year-to-date membership growth accelerated by 180%, contributing $4.1 million in Q4 membership fees (25% of total revenue).
  • Fee Adjustment:: Annual membership fees for new and renewing members (after February 1, 2026) increased from $40 to $50.
  • Profitability Outlook:: Short-term EPS pressure from increased acquisition spending is expected to be offset by long-term recurring revenue growth, targeting improved profitability in 2026.

Membership Growth Accelerates

Membership growth accelerated at a rate of 180% year-to-date, with new Club Members coming from both legacy members and new to Travelzoo. Membership fees revenue increased to $4.1 million in Q4, accounting for around 25% of revenue, and is expected to continue growing in 2026. As Christina Ciocca, Chair, Chief Membership Officer, and General Counsel, noted, the company is expecting the first Travelzoo META experiences to become available in Q2 2026.

Revenue Trends and Member Acquisition

Revenue from advertising and commerce was soft in Q4, but expected to continue into Q1. Membership fees revenue increased by $0.5 million, with a potential for higher growth in 2026. Holger Bartel emphasized the importance of maintaining a good return on investment in member acquisition, which would lead to increased revenue and profitability over time. The company expects to increase member acquisition in 2026, which will impact EPS in the short term but lead to improved profitability as recurring revenue from membership fees grows.

Valuation Metrics

With a P/E Ratio of 14.98 and an EV/EBITDA of 9.62, the market appears to be pricing in moderate growth expectations. The P/S Ratio of 0.77 suggests that the stock may be undervalued relative to its revenue growth prospects. Analysts estimate next year's revenue growth at 10.2%, which may be achievable given the company's increasing membership base and growing membership fees revenue.

Outlook and Challenges

The company sees a mixed travel outlook for 2026, with luxury travel booming but lower-end travel facing challenges. While this demographic has resulted in softness in advertising and commerce, particularly in Q4 and Q1, new hotel openings worldwide are expected to alleviate this trend going forward. The price increase in annual fees from $40 to $50 may also help to drive revenue growth.

Balance Sheet Update

The company's balance sheet shows a decrease in accounts receivable, which led to an increase in DSOs. This is largely due to the team's better collection efforts, as well as more aggressive outreach to clients to ensure timely payments.

3. NewsRoom

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Travelzoo Announces Share Repurchase Program

14:00

Source: prnewswire.com

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Club Offers for Travel Enthusiasts in Canada

Feb -20

Source: prnewswire.com

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Travelzoo (TZOO) Q4 2025 Earnings Call Transcript

Feb -19

Source: seekingalpha.com

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Travelzoo (TZOO) Reports Break-Even Earnings for Q4

Feb -19

Source: zacks.com

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Travelzoo Reports Fourth Quarter 2025 Results

Feb -19

Source: prnewswire.com

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Club Offers for Travel Enthusiasts in the U.S.

Feb -18

Source: prnewswire.com

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Club Offers for Travel Enthusiasts in the UK

Feb -17

Source: prnewswire.com

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Travelzoo (TZOO) Expected to Announce Earnings on Thursday

Feb -17

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.76%)

6. Segments

Travelzoo North America

Expected Growth: 7%

Travelzoo North America's 7% growth driven by increasing online travel bookings, rising demand for experiences over material goods, and effective email marketing campaigns targeting high-intent travelers. Additionally, the company's strong brand recognition, user-friendly website, and mobile app contribute to its growth.

Travelzoo Europe

Expected Growth: 6%

Travelzoo Europe's 6% growth is driven by increasing online travel bookings, rising demand for experiential travel, and strategic partnerships with travel suppliers. Additionally, the company's focus on mobile optimization, personalized travel recommendations, and loyalty programs contribute to its growth momentum.

Jack's Flight Club

Expected Growth: 8%

Jack's Flight Club from Travelzoo's 8% growth is driven by increasing demand for affordable travel, strategic partnerships with airlines, and effective email marketing campaigns. Additionally, the club's exclusive deals and personalized travel recommendations contribute to its growth, as well as its user-friendly website and mobile app.

New Initiatives

Expected Growth: 9%

Travelzoo's 9% growth driven by new initiatives, including expansion into new markets, increased investment in mobile app development, and strategic partnerships with travel industry leaders. Additionally, enhanced user experience, improved search functionality, and targeted marketing campaigns have contributed to the growth.

7. Detailed Products

Travelzoo Top 20

A weekly newsletter featuring the top 20 travel deals curated by Travelzoo's team of experts

Local Deals

Exclusive deals on experiences and activities in over 100 cities worldwide

Travelzoo Search

A travel search engine that allows users to compare prices on flights, hotels, and package deals

Newsflash

A daily email featuring last-minute travel deals and error fares

Travelzoo Hotel Search

A hotel search engine that allows users to compare prices and find deals on accommodations

Travelzoo Getaway

A travel booking platform that offers exclusive deals on vacation packages

8. Travelzoo's Porter Forces

Forces Ranking

Threat Of Substitutes

Travelzoo's deals are often unique and exclusive, making it difficult for customers to find substitutes. However, customers may still choose to book directly with travel providers or use other travel deal platforms.

Bargaining Power Of Customers

Individual customers have limited bargaining power due to Travelzoo's large customer base and the company's ability to negotiate exclusive deals with travel providers.

Bargaining Power Of Suppliers

Travel providers have some bargaining power due to their ability to negotiate contracts and set prices. However, Travelzoo's large customer base and exclusive deals give the company some leverage in negotiations.

Threat Of New Entrants

The online travel deal market is highly competitive, and new entrants can easily enter the market. Travelzoo must continually innovate and improve its offerings to stay ahead of competitors.

Intensity Of Rivalry

The online travel deal market is highly competitive, with many established players and new entrants vying for market share. Travelzoo must continually innovate and improve its offerings to stay ahead of competitors.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 60.89%
Debt Cost 3.95%
Equity Weight 39.11%
Equity Cost 12.27%
WACC 7.20%
Leverage 155.70%

11. Quality Control: Travelzoo passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Travelzoo

A-Score: 4.2/10

Value: 8.8

Growth: 6.2

Quality: 7.2

Yield: 0.0

Momentum: 0.0

Volatility: 2.7

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Clear Channel Outdoor

A-Score: 4.0/10

Value: 7.0

Growth: 2.8

Quality: 4.0

Yield: 0.0

Momentum: 7.5

Volatility: 2.7

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Innovid

A-Score: 3.8/10

Value: 3.1

Growth: 4.6

Quality: 4.8

Yield: 0.0

Momentum: 7.0

Volatility: 3.7

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Direct Digital Holdings

A-Score: 3.5/10

Value: 10.0

Growth: 3.0

Quality: 5.5

Yield: 0.0

Momentum: 2.0

Volatility: 0.3

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AdTheorent Holding Company

A-Score: 3.0/10

Value: 4.3

Growth: 2.0

Quality: 4.6

Yield: 0.0

Momentum: 6.0

Volatility: 1.3

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Cardlytics

A-Score: 2.8/10

Value: 9.8

Growth: 2.9

Quality: 3.4

Yield: 0.0

Momentum: 0.5

Volatility: 0.0

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

6.91$

Current Price

6.91$

Potential

-0.00%

Expected Cash-Flows