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Open Table Reveals Strong Growth in its Second Quarter, Shares Slightly Expensive

publication date: Aug 3, 2011
author/source: Valuentum Analysts

Open Table (OPEN), which provides online restaurant reservation services, reported solid second-quarter results Tuesday that showed a 50%-plus increase in revenue, installed restaurants and seated diners from the same period a year ago. North American results were solid, with adjusted EBITDA jumping nearly 70% from last year’s quarter. The firm’s international results also revealed improvement. Open Table’s installed restaurant and seated diners base outside of North America more than tripled, and the company reduced its EBITDA loss for this segment to $0.5 million from $1.2 million in the same period a year ago. Subscription, reservation, and installation (other) revenues jumped 20%, 70%, and 172% in the quarter. Consensus had been looking for better performance from subscription and international expansion, but we can’t be too pessimistic on 50%-plus firm-wide top-line growth. The firm also announced that it has filled a gaping hole in its executive suite, picking up Duncan Robertson as CFO (effective August 23). In all, we were impressed with Open Table’s performance in its second quarter, but we still think the firm is a bit expensive based on our DCF process, and we remain on the sidelines at this time.

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