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Are Investors Undervaluing Travelzoo (TZOO) Right Now?

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One company value investors might notice is Travelzoo (TZOO - Free Report) . TZOO is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 10.69, which compares to its industry's average of 23.74. Over the past 52 weeks, TZOO's Forward P/E has been as high as 11.91 and as low as 5.37, with a median of 8.57.

Finally, investors will want to recognize that TZOO has a P/CF ratio of 10.56. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. TZOO's current P/CF looks attractive when compared to its industry's average P/CF of 14.33. Within the past 12 months, TZOO's P/CF has been as high as 11.87 and as low as 5.77, with a median of 8.50.

These are only a few of the key metrics included in Travelzoo's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, TZOO looks like an impressive value stock at the moment.


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