Travelzoo stock exploded higher after the company reported earnings. The company reported $30.9 million in Q1 2018. In Q1 2017, the company reported $28.4 million. In other words, revenue was up 8.8% year-over-year. The stock is trading at nearly the exact same price as it did on April 27, 2017, when it reported revenue a year ago.

Travelzoo stock spiked up on the earnings report.

TZOO chart spikes up on earnings.

The long upper shadow are the bodies of traders who chased this stock higher today. Traders took profits into the upward move leaving those who arrived to the party late, holding the bag.

Revenue dropping at TZOOThe P/E is a nose-bleeding 59.82 and the Forward P/E is a very high 33. To justify these multiples, the company must have a compelling growth story right? Wrong. Revenue has been dropping at Travelzoo for years. But these high multiples should be supported by anticipated future growth, right? Maybe. I’m not convinced that in a rising rates environment, as consumers are squeezed by a global slowdown and rising interest rates by central banks around the world, that discretionary spending on travel isn’t going to hurt Travelzoo’s future anticipated growth.

While TZOO was a good intra-day momentum trade, there was heavy profit taking that left a lot of traders soaked by more experienced ones who sold on the big move higher.

Guy kicked into water

Pumpers are claiming this stock is going up 1,000% over the coming year. I don’t see it.

For now, this stock gets a too hot to buy rating.

Travelzoo In the News

[financial_news symbol=”tzoo” source=”yahoo,seekingalpha” template=”basic” items=”10″]


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