2 Small-Cap Travel Stocks to Scoop Up for a Rebound in 2022

NASDAQ: TRVG | trivago N.V. News, Ratings, and Charts

TRVG – The travel industry was well on its path to recovery, but the omicron variant has again marred its growth. However, the efficacy of existing vaccines and other therapies and easing travel restrictions should bolster the travel industry’s growth in 2022. So, we believe it is an opportune time to bet on fundamentally sound, small-cap travel stocks Trivago (TRVG) and Travelzoo (TZOO). Read on.

The travel and tourism industry, which started regaining its footing after nearly two years of devastation wrought by the COVID-19 pandemic, is being rattled again as governments impose new travel restrictions to contain the spread of the COVID-19 omicron variant. However, the Biden administration plans to ease travel restrictions imposed last month on eight southern African nations because U.S. public health authorities are confident that an omicron-specific vaccination is not required, and that current vaccines and booster shots are highly effective against it.

According to the United States Travel Association, domestic leisure travel in the United States has rebounded to pre-pandemic levels. Furthermore, it is anticipated that domestic leisure travel will continue to drive the recovery of the U.S. travel sector in the near term and will regain 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%.

Given this backdrop, we think it could be wise to scoop up quality small-cap travel stocks Trivago N.V. (TRVG) and Travelzoo (TZOO).

Trivago N.V. (TRVG)

With a market capitalization of $763.07 million, Düsseldorf, Germany-based TRVG, with its subsidiaries, provides a hotel and lodging search platform in the United States, Germany, the United Kingdom, Brazil, and internationally. It provides a hotel meta-search engine for online travel companies, hotel chains, and independent hotels. The platform is accessible via 54 localized websites and applications in 32 languages.

In October, TRVG and HUAWEI, one of the world’s largest information and communications technology infrastructure and smart devices providers, announced a collaboration to create travel products for use on the HUAWEI Mobile Services platform. A new Trivago app will be available on HUAWEI’s AppGallery, allowing users to immediately compare millions of accommodations globally from hundreds of booking sites to discover their ideal picks at a great price. 

TRVG’s revenue increased 128.6% year-over-year to €138.64 million ($152.41 million) in the third quarter, ended September 30, 2021. Its operating income came in at €8.54 million ($9.67 million), versus a €1.35 million ($1.53 million) operating loss in the prior-year period. The company reported €5.53 million ($6.26 million) in net income, compared to a net loss of €2.31 million ($2.61 million) in the third quarter of 2020. Its EPS amounted to €0.02 ($0.02), compared to a €0.01 ($0.01) loss per share in the same period last year.

TRVG’s EPS is expected to grow 96.3% in its fiscal 2021. Analysts expect TRVG’s revenue to increase 38.1% year-over-year to $408.93 million in the current year.

TRVG’s POWR Ratings reflect this promising outlook. The company has an overall B rating, which translates to Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.

TRVG is also rated a B for Growth, Sentiment, and Quality. Within the F-rated Internet industry, it is ranked #3 of 77 stocks. To see additional POWR Ratings for Stability, Value, and Momentum for TRVG, click here.

Travelzoo (TZOO)

New York City-based TZOO is an Internet media company that offers travel, entertainment, and local discounts from travel and entertainment corporations and local businesses around the Asia Pacific, Europe, and North America. In addition, the company runs the Travelzoo Network, a network of third-party Websites that advertise the company’s published travel deals, and local deals and getaway listings, which allow its users to purchase vouchers for deals 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 year-ago value to $15.69 million. Its gross profit grew 16.9% year-over-year to $12.7 million. The company reported $2.82 million in net income, compared to a $1.35 million net loss in the third quarter of 2020. Its EPS amounted to $0.22, compared to a loss per share of $0.12 in the same period last year.

The company’s EPS is expected to grow 360% year-over-year to $0.39 in the current year. In addition, its revenue is projected to increase 25.9% in the current year and 30.7% next year. TZOO’s stock has gained 9.3% in price over the past year and 7.6% year-to-date.

TZOO’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, which equates to Buy in our POWR Ratings system. TZOO also has an A grade for Quality and a B for Growth and Value. The stock is ranked #1 in the Internet industry.

Beyond the POWR Ratings grades I have just highlighted, you can see the TZOO ratings for Sentiment, Stability, and Momentum.

 


TRVG shares were trading at $2.12 per share on Tuesday morning, down $0.01 (-0.47%). Year-to-date, TRVG has declined -12.40%, versus a 29.57% rise in the benchmark S&P 500 index during 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. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
TRVGGet RatingGet RatingGet Rating
TZOOGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com


:  |  News, Ratings, and Charts

Off Target?

There was reason for optimism earlier in the week as the S&P 500 (SPY) advanced nicely after skirting bear market territory. But then on Tuesday WalMart had shockingly poor earnings which was easily ignored. Unfortunately the next day Target reported even worse results and the investment world took notice with a 4% sell off. That rout extended through Friday as we briefly blew past the bear market dividing line at 3,855 to a low of 3,810. Then a late rally ensued ending the session back above bear territory at 3,901. Does WalMart and Target earnings truly change our outlook on the economy and what it means for the stock market? That is the key topic we need to explore this week in our POWR Value commentary. Read on below for more…

:  |  News, Ratings, and Charts

3 Defensive Stocks to Consider Buying During the Market Downturn

The Fed’s aggressive interest rate increases to fight high inflation has raised concerns about a potential recession. During times of market turmoil, companies in defensive sectors will likely perform better than the broader market owing to inelastic demand for their products. Thus, we think it could be profitable now to bet on shares of defensive companies CVS Health (CVS), PepsiCo (PEP), and Albertsons (ACI). Read on.

:  |  News, Ratings, and Charts

Should You Be Worried About $200 Oil?

One of the biggest challenges facing the economy is the rising price of oil. Already, it’s starting to eat into consumer spending and exacerbating other inflationary pressures. However, investors should prepare themselves for a world with much higher oil prices. In this article, we will explore some reasons that oil prices could surge even higher and strategies investors can use to profit in this scenario. Read on below to find out more…

:  |  News, Ratings, and Charts

3 High-Quality Dividend Aristocrats to Buy in May

The stock market is experiencing heightened volatility and given the Fed’s aggressive monetary stance to tame inflation, stocks might tumble further in price before hitting a bottom. Hence, we think dividend aristocrats W.W. Grainger (GWW), Target Corp. (TGT), and Cintas Corp. (CTAS) could be quality additions to one’s portfolio now. Read on.

:  |  News, Ratings, and Charts

Should You Be Worried About $200 Oil?

One of the biggest challenges facing the economy is the rising price of oil. Already, it’s starting to eat into consumer spending and exacerbating other inflationary pressures. However, investors should prepare themselves for a world with much higher oil prices. In this article, we will explore some reasons that oil prices could surge even higher and strategies investors can use to profit in this scenario. Read on below to find out more…

Read More Stories

More trivago N.V. (TRVG) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All TRVG News