Last week, you might have seen that Travelzoo (NASDAQ:TZOO) released its first-quarter result to the market. The early response was not positive, with shares down 5.9% to US$8.50 in the past week. Results look mixed - while revenue fell marginally short of analyst estimates at US$22m, statutory earnings beat expectations 4.5%, with Travelzoo reporting profits of US$0.31 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Travelzoo after the latest results.
Taking into account the latest results, the current consensus from Travelzoo's twin analysts is for revenues of US$88.2m in 2024. This would reflect a reasonable 3.9% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to accumulate 5.6% to US$1.00. 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 are less bullish than they were before these results, given the reduced revenue forecasts and the minor downgrade to earnings per share expectations.
The analysts made no major changes to their price target of US$14.67, suggesting the downgrades are not expected to have a long-term impact on Travelzoo's valuation.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. One thing stands out from these estimates, which is that Travelzoo is forecast to grow faster in the future than it has in the past, with revenues expected to display 5.3% annualised growth until the end of 2024. If achieved, this would be a much better result than the 6.3% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 9.7% annually for the foreseeable future. Although Travelzoo's revenues are expected to improve, it seems that the analysts are still bearish on the business, forecasting it to grow slower than the broader industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. 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 least one analyst has provided forecasts out to 2026, which can be seen for free on our platform here.
You still need to take note of risks, for example - Travelzoo has 1 warning sign we think 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.