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OpenTable (OPEN) Performs as Expected

|Includes: GOOG, MCRS, OpenTable, Inc. (OPEN)
OpenTable performed as expected, which means our suggestions from yesterday's article on may still apply.

Here's a reprint of the article:

OpenTable Inc. (OPEN, Free Analysis), an online network connecting reservation-taking restaurants and people who dine at those restaurants, should slightly miss revenue estimates but meet or beat earnings estimates, according to Collins Stewart. The analyst believes that the recent pullback in shares as a long-term buying opportunity and $104.00 per share price target.

Analysts are projecting earnings of $0.30 per share on revenues that jump 46.2% to $35.86 million. Notably, the company has surpassed analyst expectations in every quarter since the third quarter of 2010 by between 21.7% and 53.3%. As a result, expectations may be running high for the current quarter, creating an opportunity to buy in low after they are announced.

Solid Business with Emerging Competition

OpenTable has seen tremendous growth over the years, with a stock that has surged from $28.00 to more than $115.00 earlier this year. Since then, the company’s stock has fallen as its growth has slowed and new competition has emerged. Last quarter, the firm’s revenues grew 57% to $34.29 million and its net income more than doubled from 11 cents to 26 cents per share, according to its 10-Q filing.

Despite these positive results, the company is facing increased competition from a number of competitors. LiveBookings – the firm’s primary European competitor – is launching a new U.S. reservation model that could challenge the company’s Connect service. While the competition doesn’t target its high-end customers, they could cannibalize its second-tier restaurants.

A Great Investment Opportunity

OpenTable remains a solid investment opportunity, while its upcoming earnings report could give investors an attractive entry point. Meanwhile, competitors like LiveBookings shouldn’t pose a major competitive threat. OpenTable should continue to dominate the domestic market as long as companies like Google Inc. (GOOG, Free Analysis) and MICROS Systems Inc. (MCRS, Free Analysis) keep away.