Yahoo Finance Earnings Report: Travelzoo Missed Revenue Estimates By 7.3%
Travelzoo (NASDAQ:TZOO) shareholders are probably feeling a little disappointed, since its shares fell 3.7% to US$8.58 in the week after its latest first-quarter results. Travelzoo missed revenue estimates by 7.3%, coming in atUS$22m, although statutory earnings per share (EPS) of US$0.31 beat expectations, coming in 4.5% ahead of analyst estimates. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
See our latest analysis for Travelzoo
Following the latest results, Travelzoo's three analysts are now forecasting revenues of US$87.4m in 2024. This would be an okay 3.0% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to shrink 2.6% to US$0.92 in the same period. 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 seem less optimistic after the recent results, reducing their revenue forecasts and making a substantial drop in earnings per share numbers.
Despite the cuts to forecast earnings, there was no real change to the US$14.67 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Travelzoo analyst has a price target of US$19.00 per share, while the most pessimistic values it at US$12.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. For example, we noticed that Travelzoo's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 4.0% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 6.3% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 9.8% per year. So although Travelzoo's revenue growth is expected to improve, it is still expected to grow slower than the industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Travelzoo. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Travelzoo going out to 2026, and you can see them free on our platform here..
Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Travelzoo that you should be aware of.
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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.