Travelzoo (TZOO) Stock Forecast & Price Target

Travelzoo is poised for growth, capitalizing on a robust recovery in the global travel industry, which has returned to and surpassed prepandemic levels. The company has indicated a promising revenue outlook, with expectations of approximately 10% revenue growth in Q2 2025, building on a solid Q1 performance of 5% growth, and a projected 12% year-over-year growth in Q4, reaching an estimated $23.2 million. The ongoing strength in travel demand, supply, and pricing over the past three years further supports a favorable financial trajectory for Travelzoo.

Travelzoo's outlook remains negative due to a decline in EBITDA compared to the previous year, attributed to increased marketing expenses for subscriber acquisition and rising costs of revenue. The company has experienced lower advertising revenues and a decreased gross margin, resulting from a strategic shift to take on inventory from travel suppliers, which may ultimately have negative implications for profitability. Furthermore, revisions to revenue estimates for 2025 and 2026—reflecting decreases to $92 million and $105 million respectively—indicate a persistent downward trend in financial performance as elevated sales and marketing investments continue to pressure margins.