Benchmark Cuts Price Target on Travelzoo (TZOO), Q3 Local Deals Pacing Moving Toward $31 Million
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Price: $8.58 -8.04%
Rating Summary:
6 Buy, 2 Hold, 0 Sell
Rating Trend:
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Today's Overall Ratings:
Up: 13 | Down: 11 | New: 14
Rating Summary:
6 Buy, 2 Hold, 0 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 13 | Down: 11 | New: 14
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Benchmark is reiterating its Buy rating on shares of Travelzoo (NASDAQ: TZOO) and is cutting its price target from $80 to $60.
The firm reports that recent market checks indicate that Local Deals revenue in August ended around $10 million gross or $3.5 million net. Deal volume largely decreased despite the 15 new markets quarter-to-date. Benchmark believes that the lower volume may be due to summer vacations, as consumers are less actively browsing on the Internet.
The company has been able to offset slowing deal volume by focusing on high-quality deals and driving greater participation within those deals. The firm believes that volumes will begin to pick back up in September.
TZOO's travel advertising segment may see a slight pickup, but it may bot be enough to offset rising offers being promoted as local deals. An analyst at Benchmark comments, "Local Deals revenue creation over the last few months has held relatively steady, pacing on track to reach our $31 million Q3 gross."
Travelzoo currently has no long-term debt, $40 million in cash, and a positive working capital of over $31 million. They initiated a 500,000 share buyback plan on August 22.
For 2011 and 2012, the Benchmark is forecasting EPS of $1.40 and $2.00 on EBITDA estimates of $40 million and $56 million.
For more ratings news on Travelzoo click here and for the rating history of Travelzoo click here.
Shares of Travelzoo closed at $36.52 yesterday.
The firm reports that recent market checks indicate that Local Deals revenue in August ended around $10 million gross or $3.5 million net. Deal volume largely decreased despite the 15 new markets quarter-to-date. Benchmark believes that the lower volume may be due to summer vacations, as consumers are less actively browsing on the Internet.
The company has been able to offset slowing deal volume by focusing on high-quality deals and driving greater participation within those deals. The firm believes that volumes will begin to pick back up in September.
TZOO's travel advertising segment may see a slight pickup, but it may bot be enough to offset rising offers being promoted as local deals. An analyst at Benchmark comments, "Local Deals revenue creation over the last few months has held relatively steady, pacing on track to reach our $31 million Q3 gross."
Travelzoo currently has no long-term debt, $40 million in cash, and a positive working capital of over $31 million. They initiated a 500,000 share buyback plan on August 22.
For 2011 and 2012, the Benchmark is forecasting EPS of $1.40 and $2.00 on EBITDA estimates of $40 million and $56 million.
For more ratings news on Travelzoo click here and for the rating history of Travelzoo click here.
Shares of Travelzoo closed at $36.52 yesterday.
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