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Fresh Competition For OpenTable (OPEN)


Food Network launches CityEats

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									Robert DeFrancesco’s
April 17, 2012

A New Competitor For OpenTable (OPEN)
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OpenTable (OPEN, $40.18) has a new competitor in the online restaurant
reservation business.

Food Network, which is owned by Scripps Networks Interactive (SNI, $48.84), has
launched CityEats in Philadelphia and Washington, D.C. The new service only has
about 130 restaurants in the mix right now, but it plans to expand its restaurant
coverage in these two initial markets and then push into NYC and San Francisco by
the end of the year.

CityEats has its work cut out for it because OpenTable is well entrenched, covering
some 17,000 restaurants in North America. In some markets, such as San Francisco,
OpenTable reservations represent nearly a quarter of all restaurant seats.

CityEats is trying to win over restaurants with lower start-up costs and reduced per-
diner reservation fees. The criticism lobbed at OpenTable has always been that its
fees are too high, so CityEats is working a solid strategy. In addition, the CityEats
website is a little more robust, offering video profiles of featured restaurants
(including chef/owner interviews) produced by Food Network.

OpenTable shares have come down from their February high of $52.64 and are
basically flat YTD. Perhaps the threat of increased competition is making some
investors nervous.

For 2012, OpenTable is expected to come in with EPS of $1.53 on revenue of $168.2
million. With a recent market cap of $906 million, OpenTable has a forward price-to-
sales ratio of 5.4, down from 9.1 in September. The forward P/E of 26.2 is 1.3 times
the expected 2012 EPS growth rate of 19.5%.
The April 2012 issue of Tech-Stock Prospector is now available at (subscription required), in the Amazon Kindle store (this
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Here are some of the topics covered in the April 2012 issue:

*Playing the tech IPO cycle
*5 promising new small caps
*Demandware powers e-commerce
*Yelp delivers the reviews
*Bazaarvoice analyzes the feedback
*ExactTarget hits the social media mark
*A former high-flyer comes back to earth
*Mobile-ad play Millennial Media
*ValueClick’s Greystripe purchase paying off
*Cloud buzz drives NetSuite shares
*Valuation update: & Concur
*Intel looks for growth in the Post-PC era
*EMC gets a boost from the cloud
*Tibco Software’s 5 key growth segments
*Behind the surge in Rackspace Hosting shares
*Cornerstone OnDemand emerges in talent management
*TSP Deal Report: Symantec buys Nukona & Odyssey

To place an order, call TSP Customer Support at 800-392-0998 or visit

Read the latest issue of Tech-Stock Prospector on your Amazon Kindle or your
Kindle for iPad/iPhone reading app.

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Tech-Stock Prospector Managing Editor Rob DeFrancesco has more than 20
years of experience covering the tech sector. He is a former senior writer with
Louis Rukeyser’s Wall Street., launched in 2003, is an investment-research service
focused primarily on the networking, storage, security, wireless and software
sectors. Annual subscription: $350.

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