Travelzoo (TZOO) Stock Forecast & Price Target

Travelzoo is positioned favorably within a recovering travel industry that has rebounded to pre-pandemic levels and is experiencing higher growth momentum. The company has indicated that it anticipates approximately 10% revenue growth for Q2 2025, representing a substantial increase from the +5% growth seen in Q1, and expects to see continued double-digit growth into Q4 as demand remains strong. With its multiple revenue segments benefiting from increased travel activity and advertising fees from businesses, Travelzoo stands to capitalize on the robust market conditions.

The financial analysis indicates a decline in EBITDA compared to the prior year, driven by an increase in marketing expenses related to subscriber acquisition and higher costs of revenue, which is exerting pressure on overall profitability. Additionally, the company is experiencing lower advertising revenues and diminished gross margins due to the strategy of taking on inventory from travel suppliers, which may limit its revenue-generating potential. Furthermore, although management noted low deactivation rates ahead of subscription renewals, the reliance on elevated marketing spend to acquire subscribers raises concerns about sustainable profitability moving forward, particularly amid slower growth in the European segment.