Piper's OpenTable upgrade: Firm likes new marketing efforts

Piper's Michael Olson, who upgraded OpenTable (OPEN +1.2%) to Overweight this morning, thinks the restaurant reservation platform's growth strategy is "shifting toward a renewed focus on consumer marketing and mobile growth," and is a fan of the move.

Olson sees OpenTable's efforts, which include the hiring of new marketing personnel and are expected to feature a pickup in mobile ad spend, leading to "an acceleration in OpenTable adoption during 2014-15." That, in turn, is expected to yield "an inflection point similar to what occurred for online travel during the early 2000s."

His PT is now at $80, or a full 35x a 2014 EPS estimate of $2.28 (consensus is at $2.21).

Shares now +44% YTD.

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    In the US, Open Table has transformed from a niche service to a utility service that connects diners and restaurants. Open Table is absolutely indispensable to many of the restaurants that use it. As consumers continue to become more comfortable and dependent on using mobile (instead of using a computer) they will undoubtedly increase their usage of Open Table. Open Table has not even scratched the surface of what they can do with the network they've created. For example, if they start layering in financial services (e.g., being able to pay for dinner via a payment service provided by Open Table) they will become immensely more valuable. The revenue and profit potential is enormous. 10X what they are today.
    18 Oct 2013, 06:41 PM Reply Like
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