OpenTable, Inc. (OPEN) just hit a new all-time high at $82.70 after posting an impressive Q3 earnings surprise of 90% in early November. With estimates on the rise and a bullish growth projection, this Zacks #1 rank stock offers three courses of momentum.
Company Description
OpenTable, Inc., together with subsidiaries, provides restaurant reservation solutions both domestically and internationally. The company was founded in 1998 and has a market cap of $1.5 billion.
Although OPEN has been trending higher for most of the last 18 months, shares got an extra boost on November 2 after the company reported strong Q3 results that included a 90% earnings surprise.
Third-Quarter Results
Revenue for the period was up 44% from last year to $25 million. Earnings also came in strong at 19 cents, 90% ahead of the Zacks Consensus Estimate, where the company has an average earnings surprise of 139% over the last four quarters.
The good quarter was driven by strong results out of North America, with installed restaurants up 26% and seated diners up 52% to 15.4 million.
Financial Profile
OpenTable also emerged from the quarter with its strong balance sheet in tact, with cash and equivalents up $45 million from last year to $74 million and no long-term debt.
Estimates
We saw some pretty solid movement in estimates off the good quarter, with the current year up 20% to 53 cents and the next-year estimate up 10 cents to 84 cents, a bullish 57% growth projection.
But with shares ripping higher over the last few months, the valuation picture is a little scary at 96X forward earnings, a steep premium to the industry average.
2-Year Chart
On the chart, OPEN just hit a new all-time high after charging higher in early January. Look for support from the long-term trend, take a look below.
Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the new Zacks Momentum Trader Service.
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