TravelZoo Shares Plunged: What You Need to Know

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What:TravelZoo (NAS: TZOO) dropped 10% in intraday trading today after competitor Priceline.com (NAS: PCLN) announced far, far better than expected earnings and guidance.

So what: Priceline reported non-GAAP EPS of $5.49, trouncing the consensus estimate of $4.91. Management guided Priceline's non-GAAP EPS for the current quarter to $9.10 to $9.30, well above the $7.98 consensus estimate.

Now what: What a difference from TravelZoo's July 21 earnings report, when EPS of $0.30 badly missed the consensus estimate of $0.39. TravelZoo's revenue grew 34% year over year, well below Priceline's revenue growth of 44% year over year. That suggests that Priceline is taking market share. What's more, TravelZoo's disappointing results probably kept expectations low going into Priceline's earnings report.

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At the time this article was published Fool contributor Cindy Johnson owns no shares of any company named above. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

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