Opentable Inc. Stock Upgraded (OPEN)
NEW YORK (
)
-- Opentable
(Nasdaq:
) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and robust revenue growth. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and premium valuation.
Highlights from the ratings report include:
- OPENTABLE INC has improved earnings per share by 38.1% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, OPENTABLE INC increased its bottom line by earning $0.89 versus $0.59 in the prior year. This year, the market expects an improvement in earnings ($1.49 versus $0.89).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Internet Software & Services industry average. The net income increased by 36.0% when compared to the same quarter one year prior, rising from $5.14 million to $6.99 million.
- The gross profit margin for OPENTABLE INC is currently very high, coming in at 80.90%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 18.80% trails the industry average.
- OPEN's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 39.33%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, OPEN is still more expensive than most of the other companies in its industry.
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OpenTable, Inc. provides restaurant reservation solutions in the United States, Canada, Mexico, Europe, and Asia. It offers solutions that form an online network connecting reservation-taking restaurants and people who dine at those restaurants. The company has a P/E ratio of 62.7, above the average diversified services industry P/E ratio of 57.4 and above the S&P 500 P/E ratio of 17.7. Opentable has a market cap of $1.11 billion and is part of the
sector and
industry. Shares are up 31.5% year to date as of the close of trading on Wednesday.
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-- Written by a member of TheStreet RatingsStaff
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