Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, online travel deal company Travelzoo
With that in mind, let's take a closer look at Travelzoo's business and see what CAPS investors are saying about the stock right now.
|Headquarters (Founded)||New York (1998)|
|Market Cap||$427.8 million|
|Industry||Internet software and services|
|Trailing-12-Month Revenue||$130.7 million|
CEO Christopher Loughlin (since July 2010)
CFO Glen Ceremony (since May 2011)
|Return on Equity (Average, Past 3 Years)||24.4%|
|Cash/Debt||$40.3 million / $0|
Sources: S&P Capital IQ and Motley Fool CAPS.
This past summer, Jeffrey2012 nicely summed up the Travelzoo bear case:
This stock has no dominant market niche and few barriers to entry. ... In the last three years margins have continued to erode. ... A better bet is [Expedia] or [priceline] as well as numerous travel industry stocks. Insiders have been dumping large numbers of shares.
In fact, Travelzoo still sports a lofty price-to-cash flow multiple of 37.9. That represents a clear premium to listed rivals Expedia (7.2), Google (12.7), and priceline (24.3).
CAPS member Jeffrey2012 elaborates on the bear case:
Travelzoo's claim to fame is their entrance into the social coupon frenzy that seems to have gripped investors. Unfortunately for a lot of them, it's not as profitable as it seems. ...
The company's management is very suspect to me right now since they are just chasing a fad and are willing to risk a lot of margin for it. Not to mention it is overpriced and has no real credible advantage in the exploding market for social marketing. ... I'm not sure if I want to be in a fad company that will surely be taken down by the many competitors i.e. livingsocial, google, and the million of other sites that are catering to this niche.
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