The news was potent enough to send some stocks -- Travelzoo and OpenTable in particular -- soaring.
Now that Groupon has been exposed as a dot-com speedster with a lack-of-profitability problem, investors have turned on the publicly traded coattail-riders.
Let's Make a Travel Deal
If you've been online long enough, you're probably familiar with the Travelzoo Top 20 email. This weekly missive of 20 sponsored travel deals reaches roughly 20 million opt-in recipients.
Travelzoo shares broke $100 back in April. Now they've fallen all the way down to the high $20s. The beating is overdone, and the once richly priced growth stock is a bargain at 20 times this year's projected earnings, and less than 16 times next year's bottom-line target.
The market was disappointed with Travelzoo's most recent quarter, even though revenue and earnings climbed 34% and 51%, respectively. The company's valuation may have been tough to justify at its peak, but its recent earnings represent stellar growth for a company now fetching a forward earnings multiple in the teens.
OpenTable has also worked its way down to an irresistible price point, but Travelzoo is the better value right now.
It's harder to get excited about XO Group. The company that until recently was known as The Knot runs the popular TheKnot.com website for brides-to-be. It has gone on to broaden its reach by launching sites for young couples and expectant mothers.
XO is also pretty expensive for a company banking on an uncertain turnaround in fancy nuptials to get its lead-generating prowess back in action. XO shares fetch a whopping 54 times this year's estimates and a still-lofty 32 times next year's profit forecast.
It's hard to get excited about staging lavish weddings in these challenging economic times. It's a lot easier to get behind Travelzoo, a company that is making the most of this iffy climate by providing great travel deals put out by resorts, cruise lines, and airlines with excess capacity.
Longtime Motley Fool contributor Rick Munarriz does not own shares in any of the stocks in this article, except for Travelzoo. Motley Fool newsletter services have recommended buying shares of OpenTable and Travelzoo.