NEW YORK (TheStreet) -- OpenTable (OPEN) surged to a 52-week high of $104.32 on Friday amid news that Priceline (PCLN) would buy the restaurant reservation service for $2.6 billion in an all-cash deal.
Priceline will pay $103 a share, a 46% premium over OpenTable's Thursday closing price of $70.43.
The stock was up 46.99% to $103.53 at 12:12 p.m. Nearly 7.5 million shares had changed hands by that point, which easily surpassed the average volume of 636,345.
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 several positive factors, 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, good cash flow from operations, expanding profit margins and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Despite its growing revenue, the company underperformed as compared with the industry average of 21.2%. Since the same quarter one year prior, revenues rose by 18.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in 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 2.49, which demonstrates the ability of the company to cover short-term liquidity needs.
- Net operating cash flow has increased to $15.56 million or 28.89% when compared to the same quarter last year. In addition, OPENTABLE INC has also modestly surpassed the industry average cash flow growth rate of 23.19%.
- The gross profit margin for OPENTABLE INC is currently very high, coming in at 83.61%. 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 -6.77% is in-line with the industry average.
- OPENTABLE INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. 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 ($1.91 versus $1.40).
- You can view the full analysis from the report here: OPEN Ratings Report