UPDATE: Piper Jaffray Lowers PT on OpenTable After Q4 Results Ahead of Consensus
In a report published Friday, Piper Jaffray reiterated its Neutral rating on OpenTable (NASDAQ: OPEN), but slightly lowered its price target from $50.00 to $49.00.
Piper Jaffray noted, “Reported Q4 results slightly ahead of consensus for both revenue & EPS. The most important metric, North American seated diner growth, decelerated 5 points (vs. Q3) to 21% y/y. The business remains fundamentally solid with a strong potential multi-year secular tailwind at its back; in order to capitalize on this tailwind, however, OpenTable will need to invest in initiatives to drive seated diner growth in North America. Management guided CY13 EPS below consensus largely based on the margin impact from increasing spend on seated diner conversion. While, in our view, the increased spend to drive seated diner growth is the right long-term strategy, it impacts near-term (CY13) margin expansion potential. We believe the current valuation properly reflects the balance between OpenTable's strong position within the rising tide of online reservations and the increased investment that will be required to capitalize on it.”
OpenTable closed on Thursday at $49.31.
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