Jefferies Cuts Price Target on Travelzoo (TZOO), Long-Term Thesis Remains Strong
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Price: $7.14 -1.38%
Rating Summary:
7 Buy, 2 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
7 Buy, 2 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Jefferies is reiterating its Buy rating on shares of Travelzoo (NASDAQ: TZOO), but is lowering its price target from $37 to $32.
The firm notes, strengthening December sales trends are not enough to offset weakness seen over the months of October and November. The company reported 565 deals from the beginning of December to the fifteenth, on track to substantially beat Novembers total of 628 deals.
Based on the trends seen over the past few months, the firm is now forecasting gross local voucher sales at $36-37 million in Q4, well below its previous estimate of $41 million. Jefferies also cut its Q4 EPS estimate from $0.36 to $0.34.
For FY11 and FY12, Jefferies lowered its EPS estimates from $0.17 and $1.80 to $0.15 and $1.63. Revenue for FY11 and FY12 is now forecasted to be $150.8 million and $174 million, down from its previous estimates of $152.6 million and $185.6 million.
An analyst at Jefferies comments, "While the volatility in monthly sales increases TZOO’s risk profile, we're encouraged by the company’s progress to-date in growing its Local deals segment. We also note that the increase in voucher sales in Dec. highlights the potential to drive faster growth by increasing deal frequency. We're maintaining our Buy rating on the stock."
For an analyst ratings summary and ratings history on Travelzoo click here. For more ratings news on Travelzoo click here.
Shares of Travelzoo closed at $27.00 yesterday.
The firm notes, strengthening December sales trends are not enough to offset weakness seen over the months of October and November. The company reported 565 deals from the beginning of December to the fifteenth, on track to substantially beat Novembers total of 628 deals.
Based on the trends seen over the past few months, the firm is now forecasting gross local voucher sales at $36-37 million in Q4, well below its previous estimate of $41 million. Jefferies also cut its Q4 EPS estimate from $0.36 to $0.34.
For FY11 and FY12, Jefferies lowered its EPS estimates from $0.17 and $1.80 to $0.15 and $1.63. Revenue for FY11 and FY12 is now forecasted to be $150.8 million and $174 million, down from its previous estimates of $152.6 million and $185.6 million.
An analyst at Jefferies comments, "While the volatility in monthly sales increases TZOO’s risk profile, we're encouraged by the company’s progress to-date in growing its Local deals segment. We also note that the increase in voucher sales in Dec. highlights the potential to drive faster growth by increasing deal frequency. We're maintaining our Buy rating on the stock."
For an analyst ratings summary and ratings history on Travelzoo click here. For more ratings news on Travelzoo click here.
Shares of Travelzoo closed at $27.00 yesterday.
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