Is Investing in Travelzoo Stock a Smart Move right now? A Detailed Look

Is Investing in Travelzoo Stock a Smart Move right now? A Detailed Look

Travelzoo Inc., a global internet media company, has recently caught the attention of many investors. The company has been around for 23 years and has made a name for itself in the travel industry by providing its users with discounted travel deals. With the pandemic slowing down the travel industry, many investors are wondering if investing in Travelzoo is a smart move right now.

Pros:

1. Growing User Base

Travelzoo has a growing user base, with over 30 million members worldwide. With travel slowly starting to pick up as vaccinations roll out, it could be a good time for Travelzoo to capitalize on this. More users mean more potential revenue for the company.

2. Strong Financials

Travelzoo’s financials indicate that the company is in a good position. The company has no debt and $59 million in cash, making it a financially stable option. In addition, the company’s revenue has been consistently rising from $124 million in 2017 to $126 million in 2019.

3. Focus on Local Deals

With many individuals still hesitant to travel internationally due to the pandemic, Travelzoo has shifted its focus to local deals. This could be a game-changer for the company, as consumers are more likely to purchase deals for local activities.

Cons:

1. Struggling during the Pandemic

Travelzoo has taken a hit during the pandemic, with the company’s revenue dropping from $126 million in 2019 to $60 million in 2020. While the company has shown resilience, there is still uncertainty surrounding the future of the travel industry.

2. Increased Competition

With many companies in the travel industry, Travelzoo faces substantial competition from giants such as Expedia and Tripadvisor. The company’s success will depend on its ability to differentiate itself from the competition and provide unique offerings to its users.

3. High Valuation

Travelzoo’s current valuation is quite high, with a price to earnings ratio of 107. This means that the stock may be overvalued and not a good investment option.

Overall, the decision to invest in Travelzoo stock depends on a variety of factors. While the company has a strong financial base and a growing user base, there are still risks associated with investing in the travel industry during the pandemic. Ultimately, investors should keep a watchful eye on the company’s financials and how it navigates through the ongoing adversity caused by COVID-19.