Travelzoo falls after analyst cuts estimates, price target
NEW YORK—Shares of Travelzoo Inc. fell Monday in advance of the company's first-quarter financial report after an analyst cut his first-quarter earnings estimate for the company and lowered his price target for the stock.
Travelzoo shares fell 71 cents, or 5.5 percent, to $12.23. In the past year, the stock has traded between $9.61 and $29.38.
The travel information site operator was expected to issue its first-quarter report after the market closes Monday.
In a client note, Wedbush Morgan Securities analyst Edward Woo lowered his first-quarter estimate for Travelzoo's profit to 2 cents per share from an earlier estimate of 13 cents per share and cut his price target to $12 from $15.
Woo, who also decreased his 2008 and 2009 estimates for Travelzoo's earnings per share, cited the expectation that the company will keep investing heavily in international expansion.
"Travelzoo is currently losing money on its international operations and we believe this will likely continue into 2009. We note that Travelzoo stated in its recent SEC 10-K that 'it is likely that we will not sustain profitability in 2008,' " he said.
The analyst kept his "Hold" rating for the stock and continues to expect $21 million in revenue for the quarter.
Analysts polled by Thomson Financial, on average, expect a profit of 8 cents per share on $19.7 million in revenue.
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