NEW YORK (AP) — OpenTable's stock climbed to its highest level in more than two years on Wednesday after the company posted third-quarter results that topped analysts' estimates.
THE SPARK: Late Tuesday OpenTable Inc. — which allows people to make restaurant reservations through its website — reported an adjusted profit of 50 cents per share on revenue of $46.7 million. Analysts surveyed by FactSet expected earnings of 42 cents per share on revenue of $46 million.
THE ANALYSIS: While traders were enthusiastic, analysts had tempered reactions to the results.
Shawn Milne of Janney Capital Markets said that OpenTable had a solid quarter, posting a stronger-than-expected profit. While North America comparisons are easy in the fourth quarter due to Hurricane Sandy's impact at the end of last year, the analyst said in a note to clients that it will be tougher to show strong growth in the first half of 2014.
Milne raised OpenTable's price target to $62 from $56 and kept a "Neutral" rating on the stock.
Citi Investment Research's Mark May also boosted the company's price target, lifting it to $68 from $58. He kept a "Sell" rating.
May said that while the number of diners seated through its online reservations increased 27 percent, adding North American restaurants to its system continues to be an issue, with the figure only rising 1.5 percent in the quarter.
SHARE ACTION: Up $9.56, or 13.5 percent, to $8.066 in midday trading. The stock struck $82.85 earlier in the session, its highest point since July 2011.