Benchmark Cuts Price Target on OpenTable (OPEN) Due to Weak Results and Consecutive Declines
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Price: $3.53 +1.73%
Rating Summary:
4 Buy, 11 Hold, 5 Sell
Rating Trend:
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Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
4 Buy, 11 Hold, 5 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Benchmark is reiterating its Hold rating on shares of OpenTable (NASDAQ: OPEN) following the release of its Q3 results and is reducing its price target from $60 to $50.
The company reported its Q3 results with sales and EBITDA both missing expectations on weaker than expected growth in North America. The firm notes that OPEN only added 677 restaurants in North America during the quarter, missing the Street's estimate by 116 and 151 less than its quarterly average. Management highlighted that restaurant additions were weighted toward the end of the quarter, pushing the actual installations into Q4.
An analyst at Benchmark comments, "NA reservation revenue/restaurant/month declined sequentially for the second consecutive quarter. Our concern is twofold: that newer OpenTable restaurants generate fewer reservations, thus rendering the incremental prospects less attractive; and, that existing base growth is slowing which might indicate a less powerful secular Internet shift opportunity."
The firm forecasts EBITDA and EPS to growth of roughly 35 percent per year over the next two years, but is reducing its 2011 EBITDA estimate from $82.5 millin to $79.3 million. Benchmark is also lowering its 2012 revenue estimate from $183.5 million to $177.8 million.
For more ratings news on OpenTable click here and for the rating history of OpenTable click here.
Shares of OpenTable closed at $43.10 yesterday.
The company reported its Q3 results with sales and EBITDA both missing expectations on weaker than expected growth in North America. The firm notes that OPEN only added 677 restaurants in North America during the quarter, missing the Street's estimate by 116 and 151 less than its quarterly average. Management highlighted that restaurant additions were weighted toward the end of the quarter, pushing the actual installations into Q4.
An analyst at Benchmark comments, "NA reservation revenue/restaurant/month declined sequentially for the second consecutive quarter. Our concern is twofold: that newer OpenTable restaurants generate fewer reservations, thus rendering the incremental prospects less attractive; and, that existing base growth is slowing which might indicate a less powerful secular Internet shift opportunity."
The firm forecasts EBITDA and EPS to growth of roughly 35 percent per year over the next two years, but is reducing its 2011 EBITDA estimate from $82.5 millin to $79.3 million. Benchmark is also lowering its 2012 revenue estimate from $183.5 million to $177.8 million.
For more ratings news on OpenTable click here and for the rating history of OpenTable click here.
Shares of OpenTable closed at $43.10 yesterday.
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