Travelzoo (NASDAQ: TZOO)

Sector: Communication Services Industry: Internet Content & Information CIK: 0001133311
Market Cap 68.27 Mn
P/B -8.43
P/E 8.60
P/S 0.76
ROIC (Qtr) -712.02
Div Yield % 0.00
Rev 1y % (Qtr) 10.45
Total Debt (Qtr) 6.55 Mn
Debt/Equity (Qtr) -0.81

About

Price action

Investment thesis

Bull case

  • Strong operating cash flow of 12.05M provides robust 1.84x coverage of total debt 6.55M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 9.25M provide 4.49x coverage of short-term debt 2.06M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 12.05M provides exceptional 45.48x coverage of minority interest expenses 265000, showing strong core operations.
  • Strong tangible asset base of 33.77M provides 5.15x coverage of total debt 6.55M, indicating robust asset backing and low credit risk.
  • Robust free cash flow of 11.96M exceeds capital expenditure of 97000 by 123.25x, indicating strong organic growth funding capability.

Bear case

  • Operating cash flow of 12.05M barely covers its investment activities of (97000), with a coverage ratio of -124.25, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (97000) provide weak support for R&D spending of 2.61M, which is -0.04x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating cash flow of 12.05M provides insufficient coverage of deferred revenue obligations of 9.06M, which is 1.33x, raising concerns about future service delivery capabilities.
  • High financing cash flow of (14.84M) relative to working capital of (11.42M), which is 1.30x suggests concerning dependence on external funding for operational needs.
  • R&D investment of 2.61M represents just 0.04x of SG&A expenses of 59.50M, indicating potential underinvestment in innovation relative to administrative overhead.

Segments Breakdown of Revenue (2024)

Geographical Breakdown of Revenue (2024)

Peer comparison

Companies in the Internet Content & Information
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 GOOGL Alphabet Inc. 4,538.16 Bn 131.46 27.23 33.71 Bn
2 META Meta Platforms, Inc. 1,747.49 Bn 74.30 23.25 51.06 Bn
3 SPOT Spotify Technology S.A. 103.00 Bn 62.32 5.18 2.57 Bn
4 BIDU Baidu, Inc. 62.73 Bn 49.63 3.42 13.66 Bn
5 RDDT Reddit, Inc. 32.18 Bn 92.16 16.90 0.03 Bn
6 NBIS Nebius Group N.V. 27.81 Bn 127.53 81.80 4.51 Bn
7 TME Tencent Music Entertainment Group 24.66 Bn 15.77 5.54 0.54 Bn
8 PINS Pinterest, Inc. 16.95 Bn 8.53 4.18 0.21 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.40 1.10
EV to Cash from Ops. EV/CFO 5.35 -3.08
EV to Debt EV to Debt 9.84 28.98
EV to EBIT EV/EBIT 5.57 -26.54
EV to EBITDA EV/EBITDA 5.55 9.30
EV to Free Cash Flow [EV/FCF] EV/FCF 5.39 -67.01
EV to Market Cap EV to Market Cap 0.94 0.90
EV to Revenue EV/Rev 0.72 61.25
Price to Book Value [P/B] P/B -8.43 1.56
Price to Earnings [P/E] P/E 8.60 2.92
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 0.33
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 -8.92
Dividend per Basic Share Div per Share (Qtr) 0.00 0.31
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 2.58
Interest Coverage Interest Coverage 0.00 -202.56
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 41.92 -24.06
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -23.60 175.36
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 0.94
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -43.58 31.53
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -39.96 -472.14
EBIT Growth (1y) % EBIT 1y % (Qtr) -40.94 32.66
EBT Growth (1y) % EBT 1y % (Qtr) -40.94 -25.80
EPS Growth (1y) % EPS 1y % (Qtr) -35.85 -18.36
FCF Growth (1y) % FCF 1y % (Qtr) -17.39 20.83
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -0.89 19.58
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.95 0.74
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.02
Cash Ratio Cash Ratio (Qtr) 0.26 1.54
Current Ratio Curr Ratio (Qtr) 0.68 3.38
Debt to Equity Ratio Debt/Equity (Qtr) -0.81 -0.39
Interest Cover Ratio Interest Cover Ratio 0.00 -202.56
Times Interest Earned Times Interest Earned 0.00 -202.56
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 13.30 -4,283.87
EBIT Margin % EBIT Margin % (Qtr) 12.88 -4,786.62
EBT Margin % EBT Margin % (Qtr) 12.88 -5,002.12
Gross Margin % Gross Margin % (Qtr) 81.50 58.65
Net Profit Margin % Net Margin % (Qtr) 8.80 -5,003.08