An Exclusive Interview with Edward Woo, Senior Analyst with Ascendiant: Online Travel Companies Increase Scale to Become Global Players

Wall Street Transcript

67 WALL STREET, New York - October 16, 2013 - The Wall Street Transcript has just published its Internet Services Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Data Hosting Centers - Cloud Computing Secular Trends - Colocation, Managed Hosting and Cloud Computing - Increased Mobile Content Traffic - Chinese Online Monetization Trends - Internet Infrastructure Build - Enterprise Adoption of Cloud Computing

Companies include: Expedia Inc. (EXPE), Local.com Corp. (LOCM), Orbitz Worldwide, Inc. (OWW), Priceline.com Inc. (PCLN), Travelzoo Inc. (TZOO)

In the following excerpt from the Internet Services Report, Edward Woo, Senior Research Analyst, Internet / Digital Media, for Ascendiant, discusses the outlook for the online travel resources sector for investors:

TWST: Can you begin with a brief overview of your coverage of the Internet sector, including some of the specific names you follow?

Mr. Woo: My coverage of the Internet sector includes Expedia (EXPE), Groupon (GRPN), Local (LOCM), Orbitz Worldwide (OWW), Points International (PCOM), Priceline (PCLM), Travelzoo (TZOO) and TripAdvisor (TRIP).

TWST: You have "buy" ratings on all of the online travel companies except for TravelZoo, which you have rated "neutral." What are you hesitations about TravelZoo on its own and as compared to its competitors?

Mr. Woo: I'm relatively bullish on the online travel sector because, first, the travel market is really strong right now. Second, there are a lot of fundamental changes that are going to benefit the online travel companies. Travelzoo is an online advertiser in the travel sector, so it too will benefit from a lot of those industry changes, but the company specifically is going through a period of major investments in a couple of initiatives, and because of that they have been ratcheting up their costs, and so it's been negatively affecting their earnings. I think this is likely going to continue for the next couple of quarters, after which they should get the benefit and have revenue and earnings growth accelerate again, but for now I recognize that the near-term impact on earnings could keep the stock a range-bound.

TWST: Priceline recently acquired Kayak, and TripAdvisor completed a few acquisitions in Q2. What is your view of those acquisitions, and what is your outlook for further consolidation in the online travel sector in the near to midterm?

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

View Comments