NEW YORK (AP) ? Shares of OpenTable Inc. rose Wednesday after a Benchmark Co. analyst said the online reservation maker's large market share combined with improvement in the economy led him to upgrade the stock.
He also said other companies could be interested in buying OpenTable Inc.
THE SPARK: Analyst James Dobson with Benchmark upgraded shares of OpenTable to "buy" from "hold," saying worries about the company's competition increasing are "overblown."
THE BIG PICTURE: Investors worried, when Google Inc. announced in September that it was buying restaurant review service Zagat, that competition from newer companies like IAC/InterActive Corp.'s UrbanSpoon and from Google could threaten OpenTable's lead in the market. The Zagat deal gave Google access to a big catalog of customer surveys and ratings.
OpenTable, which also posts customer reviews, mainly offers a reservation service. It went public in 2009.
THE ANALYSIS: Dobson said OpenTable works with far more restaurants than its competitors.
"We don't believe any domestic competitor poses a significant financial threat to OpenTable," he told clients in a note.
He also said the improving economy meant more consumers will feel able to spend money, and that should mean more reservations.
The company also could be a desirable acquisition for a big technology company such as Google or Microsoft Corp., Dobson said.
A spokesperson from OpenTable said that the company does not comment on movements in its share price.
THE SHARES: Up $1.06, or 2.7 percent, to close at $41.06 Wednesday. OpenTable shares are down by nearly two-thirds from the 52-week high of $118.66 they hit nearly a year ago, but they've risen by a third since December.
Source: http://news.yahoo.com/opentable-shares-rise-analyst-upgrade-193006644.html
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