Travelzoo Hot On Groupon IPO (TZOO)

Benchmark Capital has a note on Travelzoo (NASDAQ: TZOO) with a Buy rating and a $54 price target.

In a note to clients, Benchmark writes, "Travelzoo (TZOO-$53.97-BUY-PT $54) stock has appreciated about 20% since our March 15th Buy recommendation versus a flat NASDAQ likely on the prospects of its blossoming Local Deals unit and recent publicity regarding a Groupon IPO which could value the local deals leader at $25 billion. The US Daily Deal or Group Buying market could grow 138% in 2011 to $2.7 billion according to a report by Local Offer Network. We suspect that Travelzoo's Local Deals has ramped nicely this quarter but not seen break out growth.

"Travelzoo's entire market capitalization is only about $900 million, so if it has any reasonable success with Local Deals and things like a Groupon IPO occur at a high valuation it should endorse upside to the valuation of Travelzoo."

Shares of Travelzoo are down 73 cents in early trading to $53.24, a loss of 1.35%.