2 small-cap travel stocks to recover for a rebound in 2022
The travel and tourism industry, which has started to recover after nearly two years of devastation from the COVID-19 pandemic, is shaken again as governments impose new travel restrictions to contain the spread of the COVID-19 omicron variant. However, the Biden administration plans to relax travel restrictions imposed last month on eight countries in southern Africa because US public health officials are convinced that a specific vaccination with omicron is not necessary and that current vaccines and boosters are very effective against it.
According to the United States Travel Association, domestic leisure travel in the United States has rebounded to pre-pandemic levels. In addition, domestic leisure travel is expected to continue to drive the recovery of the United States travel industry in the near term and is expected to return to pre-pandemic levels in 2022. The travel and tourism industry is expected to reach $ 924.28 billion by 2025, registering a CAGR of 24.5%.
Against this background, we believe that it might make sense to acquire quality small-cap travel shares Trivago NV (TRVG) and Travelzoo (TZOO).
Trivago SA (TRVG)
With a market capitalization of $ 763.07 million, Based in Düsseldorf, Germany TRVG, with its subsidiaries, offers a platform for finding hotels and accommodation in the United States, Germany, the United Kingdom, Brazil and internationally. It provides a hotel metasearch engine for online travel agencies, hotel chains and independent hotels. The platform is accessible via 54 websites and applications localized in 32 languages.
In October, TRVG and HUAWEI, one of the world’s largest providers of information and communications technology and smart device infrastructure, announced a collaboration to create travel products for use on the platform. form of HUAWEI mobile services. A new Trivago app will be available on the HUAWEI AppGallery, allowing users to instantly compare millions of accommodations around the world from hundreds of booking sites to discover their ideal choices at a great price.
TRVG’s revenue increased 128.6% year-on-year to € 138.64 million ($ 152.41 million) in the third quarter ended September 30, 2021. operating result amounted to 8.54 million euros ($ 9.67 million), compared with an operating loss of 1.35 million euros ($ 1.53 million) during the period l ‘last year. The company reported net profit of 5.53 million euros ($ 6.26 million) compared to a net loss of 2.31 million euros ($ 2.61 million) in the third quarter of 2020. Its EPS amounted to € 0.02 ($ 0.02), up from € 0.01 ($ 0.01 loss per share in the same period last year.
TRVG’s EPS is expected to grow 96.3% in its 2021 fiscal year. Analysts expect TRVG’s revenue to grow 38.1% year-on-year to $ 408.93 million for the year. current year.
TRVG POWR odds reflect this promising outlook. The company has an overall rating of B, which translates to Buy in our proprietary rating system. POWR ratings evaluate stocks based on 118 distinct factors, each with its own weight.
TRVG is also rated B for growth, feeling and quality. In the F-rated the Internet industry, it is ranked # 3 out of 77 stocks. To see additional POWR ratings for TRVG stability, value and dynamics, Click here.
Travel zoo (TZOO)
New York-based TZOO is an internet media company providing travel, entertainment and local discounts to travel and entertainment companies and local businesses in Asia-Pacific, Europe and North America. . In addition, the company operates the Travelzoo Network, a network of third-party websites that advertise the travel deals published by the company, as well as local deals and getaway listings, which allow its users to purchase vouchers for. offers from local businesses, such as spas, hotels, and restaurants. The stock has a market capitalization of $ 124.18 million.
For the third quarter, ended September 30, 2021, TZOO’s revenue increased 13.8% from its value a year ago to $ 15.69 million. Its gross profit rose 16.9% year-on-year to $ 12.7 million. The company reported net income of $ 2.82 million, compared with a net loss of $ 1.35 million in the third quarter of 2020. Its EPS was $ 0.22, compared with a loss per share of $ 0.12 for the same period last year.
The company’s EPS is expected to increase 360% year-over-year to $ 0.39 in the current year. In addition, its revenue is expected to grow 25.9% in the current year and 30.7% next year. TZOO stock has gained 9.3% in price over the past year and 7.6% since the start of the year.
TZOO’s strong fundamentals are reflected in its POWR ratings. The stock has an overall rating of B, which is equivalent to Buy in our POWR rating system. TZOO also has an A grade for quality and a B for growth and value. The action is ranked # 1 in the the Internet industry.
Beyond the POWR Ratings that I just outlined, you can see the TZOO ratings for feeling, stability and momentum.
Shares of TRVG were trading at $ 2.12 a share on Tuesday morning, down $ 0.01 (-0.47%). Year-to-date, TRVG is down -12.40%, compared to a 29.57% increase in the benchmark S&P 500 over the same period.
About the Author: Pragya Pandey
Pragya is an equity research analyst and financial journalist with a passion for investing. In college, she majored in finance and is currently pursuing the CFA program and is a Level II candidate. Following…