OpenTable Delighting Customers and Investors Alike
OpenTable (OPEN) share price trades at $68.21 after hours as it announces earnings that beat expectations yesterday. The company makes its money by providing dining reservations for consumers at a network of restaurants nationwide.
The San Francisco based OpenTable claims to have 14,000 restaurants that are located in every state in the nation and has serviced over 160 million customers since it began operations in 1998.
Profits jumped dramatically from $896,000 to $3.8 million from the prior year. Revenue was also up sharply to 24.5 million, representing a 44% annual increase. Both profit and revenue beat analysts’ expectations.
While investors are clearly delighted with OpenTable, some say that it is trading at too high of an earnings ratio. OpenTable has found a unique and profitable niche but it is one that might invite competition because barriers to entry are not significant. Still, the company has collected a large following of loyal customers who would rather have their evenings planned from their computers, and minimize the time they spend waiting in lines.
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