The investors in Travelzoo's (NASDAQ:TZOO) will be rubbing their hands together with glee today, after the share price leapt 21% to US$15.41 in the week following its quarterly results. It looks to have been a decent result overall - while revenue fell marginally short of analyst estimates at US$20m, statutory earnings beat expectations by a notable 32%, coming in at US$0.26 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Taking into account the latest results, the most recent consensus for Travelzoo from four analysts is for revenues of US$97.6m in 2025. If met, it would imply a meaningful 16% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to step up 13% to US$1.25. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$98.9m and earnings per share (EPS) of US$1.21 in 2025. So the consensus seems to have become somewhat more optimistic on Travelzoo's earnings potential following these results.

The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 6.0% to US$22.00. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Travelzoo analyst has a price target of US$35.00 per share, while the most pessimistic values it at US$17.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. One thing stands out from these estimates, which is that Travelzoo is forecast to grow faster in the future than it has in the past, with revenues expected to display 12% annualised growth until the end of 2025. If achieved, this would be a much better result than the 0.5% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 11% annually. So while Travelzoo's revenues are expected to improve, it seems that it is expected to grow at about the same rate as the overall industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Travelzoo's earnings potential next year. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Travelzoo analysts - going out to 2026, and you can see them free on our platform here.

You still need to take note of risks, for example - Travelzoo has 1 warning sign we think you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.