The 10-second takeaway
For the quarter ended March 31 (Q1), Travelzoo missed estimates on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew and GAAP earnings per share expanded.
Gross margins dropped, operating margins shrank, and net margins improved.
Travelzoo recorded revenue of $39.3 million. The five analysts polled by S&P Capital IQ looked for sales of $41.8 million on the same basis. GAAP reported sales were 6.4% higher than the prior-year quarter's $37.0 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
Non-GAAP EPS came in at $0.42. The five earnings estimates compiled by S&P Capital IQ predicted $0.40 per share on the same basis. GAAP EPS were $0.23 for Q1 compared to -$0.85 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 89.7%, 380 basis points worse than the prior-year quarter. Operating margin was 24.3%, 270 basis points worse than the prior-year quarter. Net margin was 9.5%, 4,730 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $41.8 million. On the bottom line, the average EPS estimate is $0.39.
Next year's average estimate for revenue is $164.3 million. The average EPS estimate is $1.53.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 463 members out of 650 rating the stock outperform, and 187 members rating it underperform. Among 183 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 117 give Travelzoo a green thumbs-up, and 66 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Travelzoo is outperform, with an average price target of $31.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Motley Fool newsletter services have recommended buying shares of Travelzoo. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.