Travelzoo (TZOO) Stock Forecast & Price Target

Travelzoo has demonstrated a robust recovery in the travel industry, with expectations of revenue growth achieving approximately 10% in Q2 and continuing into Q4 with projected double-digit growth. The company's North America segment remains the primary revenue driver, and it anticipates a notable increase in revenue, reflecting the strong sustained demand for travel services and entertainment offerings. Furthermore, the overall market dynamics indicate a recovery and expansion beyond pre-pandemic levels, providing a favorable outlook for Travelzoo's future financial performance.

Travelzoo's financial outlook is negatively impacted by a decline in EBITDA compared to the previous year, primarily due to increased marketing expenses tied to subscriber acquisition and higher costs of revenues. The company's advertising revenues are also projected to decrease, driven by a lower gross margin stemming from greater inventory management and reselling activities, indicating a shift in the market for travel advertising. Additionally, revenue and EPS estimates for 2025 and 2026 have been revised downward, highlighting continued profitability pressures exacerbated by the anticipated increased investment in sales and marketing to attract new subscribers.