OpenTable Inc. (NASDAQ:OPEN) is set to report FQ4 2013 earnings after the market closes on Thursday, February 6th. OpenTable is an online service that allows users to book restaurant reservations in real time at no cost. Restaurants who choose to subscribe to the service end up paying monthly and per reservation fees. This quarter Wall Street is projecting a 13% increase in profit and a 20% increase in revenue. OpenTable is expected to continue to grow its mobile user base which has been a major area of growth thanks to the smartphone boom of recent years. Here's how investors expect OpenTable to report this quarter.
The information below is derived from data submitted to the Estimize.com platform by a set of Buy Side and Independent analyst contributors.
The current Wall Street consensus expectation is for OpenTable to report 52c EPS and $51.46M revenue while the current Estimize.com consensus from 16 Buy Side and Independent contributing analysts is 54c EPS and $51.82M revenue. Throughout the past 8 quarters OpenTable has beaten the Street's profit expectations in each quarter.
This quarter the buy-side, as represented by the Estimize.com community, is expecting OpenTable to beat the Wall Street consensus on both profit and revenue.
Over the previous 6 quarters the consensus from Estimize.com has been more accurate than Wall Street in forecasting OpenTable's EPS every quarter and has been more accurate in predicting revenue twice. By tapping into a wider range of contributors including hedge-fund analysts, asset managers, independent research shops, students, and non professional investors, Estimize has created a data set that is up to 69.5% more accurate than Wall Street, but more importantly it does a better job of representing the market's actual expectations. It has been confirmed by an independent academic study from Rice University that stock prices tend to react with a more strongly associated degree to the expectation benchmark from Estimize than from the Wall Street consensus.
The magnitude of the difference between the Wall Street and Estimize consensus numbers often identifies opportunities to take advantage of expectations that may not have been priced into the market. In this case we are seeing an average differential compared to previous quarters.
The distribution of estimates published by analysts on the Estimize.com platform range from 52c to 56c EPS and $50.00M to $53.86M in revenues. This quarter we're seeing a smaller distribution of estimates compared to other quarters.
The size of the distribution of estimates relative to previous quarters often signals whether or not the market is confident that it has priced in the expected earnings already. A narrower distribution of estimates signaling more agreement in the market, which could mean less volatility post earnings.
Throughout the quarter the EPS estimate from Wall Street increased from 50c to 52c and the Estimize community raised its consensus from 51c to 54c. Wall Street elevated its revenue consensus from $50.72M to $51.46M while the Estimize forecast also went up from $51.49M to $51.82M. Timeliness is correlated with accuracy and rising analyst expectations at the end of the quarter are often a bullish indicator.
The analyst with the highest estimate confidence rating this quarter is Stockflare_COO who projects 54c EPS and $51.41M in revenue. In the Winter 2014 season, Stockflare_COO rated as the 6th best analyst and is also ranked 31st overall among over 3,750 contributing analysts. Estimate confidence ratings are calculated through algorithms developed by deep quantitative research which looks at correlations between analyst track records and tendencies as they relate to future accuracy. In this case, Stockflare_COO is expecting OpenTable to report in-line with Estimize on profit but come up short on expectations for revenue.
Wall Street and the Estimize community are both expecting considerable growth this quarter. However, this quarter investors are setting the bar higher than Wall Street, expecting OpenTable to beat the Street on both EPS and revenue.
Disclosure: No positions