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Despite Groupon and LivingSocial, |
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Travelzoo, TZOO, is still doing very well. |
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Released on Friday, September 2, 2011, 8:00 AM ET
Pittsburgh, PA (SpeculatingStocks) - Travelzoo is peaking interest again with the local deals space receiving so much publicity this year. It doesn't look like Groupon and LivingSocial will be able to cut into Travelzoo's travel deals business. The problem with Groupon and LivingSocial is that offering such a huge discount is putting pressure on businesses that may not be able to make a profit at 50% off.
Groupon and LivingSocial should still do well for themselves as the two major players in the deals market, but we doubt that they will cut into TZOO's business.
TZOO is doing very well. TZOO revenue has grown from $81.4 million in 2008 to $93.9 million in 2009 to $112.7 million in 2010. Net income over that same period grew from ($4.1 million) to $5.2 million to $13 million in 2010.
TZOO has a strong balance sheet with $40 million in cash and no long-term debt.
The rebound potential with TZOO is huge at this point in its chart. TZOO is trading at around $35 and has a 52-week high of $103.80.
There is also a big short interest of 4.43 million shares that could pop at any time. Downside risk in TZOO should be played out.
TZOO has expanded into Asia and Australia and has a lot of opportunity to take market share overseas in those markets.
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