DJ Travelzoo Withdraws Amendment Of Registration Statement Adding Shrs Of Founder, Who Offers To Delay Any Sales>TZOO
TZOO Travelzoo started with a Sell at Amtech; tgt $25 (62.18 ) -- Update --
Amtech initiates TZOO with a Sell and $25 tgt, as they believe that TZOO's fundamental performance may have peaked with the Sept qtr -- or will peak in the Dec qtr -- and that limited float issues will likely change this qtr given the recent private placement. Firm cites the following reasons for this belief: 1) increasingly competitive landscape, with competitor SideStep catching up; 2) specific competition from Yahoo! and (possibly) Google; 3) customer concentration risks, as they believe three customers each account for between 5% and 10% of rev; 4) co is heading into its seasonally weakest qtr, which may limit near-term upside; 5) fundamental trends may have just peaked, as YoY rev growth rates likely will begin decelerating in March and incremental margins likely peaked in Sept; and 6) very stretched valuation at 100x 2005 EPS, the 2nd highest among internet stocks.