Travelzoo Heads To Woodshed After Earnings Miss (TZOO, CTRP, EXPE, PCLN, MMYT, OWW)
Shares of online travel deals firm Travelzoo Inc (TZOO) are plunging 29% on heavy volume after the company reported a second-quarter profit that came in well below Wall Street estimates. The company said it earned 30 cents a share in the quarter, but analysts were expecting a profit of 39 cents a share. Travelzoo’s profit miss is plaguing the Dotcom Travel Stocks Index to the tune of an 8.9% slide.
Making matters worse, while Travelzoo did say its revenue for the quarter jumped 33.7% to $37.6 million, that number was also short of Wall Street’s expectations. Analysts were expecting Travelzoo to post revenue of $40.2 million. The company’s television advertising test campaign also resulted in a 7-cent per share hit to earnings, Travelzoo said.
The company noted its revenue growth rate was its fastest in four years and that it added 27 new Local Deals markets and 800,000 new subscribers in the quarter. Worrisome for investors may be the fact that Travelzoo grew its headcount at a record pace during the second quarter. Travelzoo shares have tumbled 36% in the past three months.
Investors can track the Dotcom Travel Stocks Index for performance trends and a suite of other metrics at tickerspy.com.
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