recently spiked to a new all-time high as the company continues to accelerate in the red-hot weekly deal space. Although the valuation looks a bit rich, this Zacks #1 rank stock is a top player in the momentum field.
Travelzoo, Inc. is an Internet media company that publishes travel and entertainment offers from various third-party companies in North America and Europe. The company was founded in 1998 and has a market cap of $1.26 billion.
Although it's not showing up in estimates, the market is hot for Travelzoo right now, recently hitting a new all-time high on speculation it has outsized earnings ahead in the booming deal space. The recent gains have been predicated on the company's growing subscriber base, on display on March 3 when it announced a big increase in its European region.
Surging Subscriber Base
Total European subscribers were reported to surpass the 5 million mark, with 415,000 new members hitting the ranks in just the first eight weeks of the year. The company noted that it was the highest growth rate it had seen in its European business since 2005.
The news comes on the heels of an announcement in early February that the company had eclipsed 22 million subscribers worldwide after adding 540,000 net users in the first 5 weeks of the year.
What's Up With Estimates?
But in spite of a surging subscriber base, we haven't seen too much movement in estimates, with the current year up just 17 cents in the last three months to $1.16 and the next-year estimate up 11 cents to $1.57, a solid 35% growth projection.
But do realized and potential earnings support the gains? The valuation picture says no, where shares are trading with a forward P/E of 63X. That's a tough valuation for even the best growth stories to maintain over an extended period of time.
On the chart, shares flipped into hyper drive in late March, almost doubling in price after jumping from $43 to a recent high of $84.84. Shares are definitely on a roll right now, take a look below.
Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the Zacks Momentum Trader Service.