Why Open Table (OPEN) Stock Is Higher Today

NEW YORK (TheStreet) -- Shares of Open Table Inc. (OPEN) are higher 5.17% to $71.80 on Friday due to an increase in revenue and income for the 2014 first quarter.

Revenue for the quarter increased 18% to $53.8 million from $45.5 million for the 2013 first quarter.

The online restaurant reservation making service reported its first quarter 2014 non-GAAP consolidated net income was $11.0 million, or 45 cents per diluted share, compared with $10.7 million, or 45 cents per diluted share from the year ago quarter.

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The company reported a consolidated net loss for the quarter of -$3.6 million, or -16 cents per diluted share. Last year Open Table reported its consolidated net income was $7.1 million, or 30 cents per diluted share.

TheStreet Ratings team rates OPENTABLE INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate OPENTABLE INC (OPEN) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, impressive record of earnings per share growth and compelling growth in net income. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 11.7%. Since the same quarter one year prior, revenues rose by 21.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • OPEN has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, OPEN has a quick ratio of 2.43, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Internet Software & Services industry and the overall market, OPENTABLE INC's return on equity exceeds that of both the industry average and the S&P 500.
  • OPENTABLE INC has improved earnings per share by 34.4% 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. During the past fiscal year, OPENTABLE INC increased its bottom line by earning $1.40 versus $1.04 in the prior year. This year, the market expects an improvement in earnings ($1.85 versus $1.40).
  • 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 38.2% when compared to the same quarter one year prior, rising from $7.46 million to $10.31 million.
  • You can view the full analysis from the report here: OPEN Ratings Report
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