Analyst 'Skeptical' About Travelzoo (TZOO) Rumor; Would Be a Seller Above $27/Share

April 11, 2012 10:53 AM EDT
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According to Bloomberg's First Word service, Benchmark's Daniel Kurnos has said he is "skeptical" about an earlier rumor Travelzoo (Nasdaq: TZOO) could be a takeover target.

Still the analyst offered a guess at fair value for the company. He said 12x the company's 2012 EBITDA estimate would imply a stock price around $34. This valuation is similar to peers in the ecommerce sector.

Kurnos sees Google (Nasdaq: GOOG) and Amazon (Nasdaq: AMZN) as two likely strategic buyers of the company. The analyst believes a private-equity buyer would not pay much over the stock's current price around $26. He said he would recommend selling shares if the rumor doesn't look legitimate and the stock pushes over $27 as he is concerned with limited upside amid the upcoming first-quarter results.

Benchmark maintains a Neutral rating and $30 price target on Travelzoo.

Shares of Travelzoo have rallied about 27 percent amid the rumor.

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