) is set to report first-quarter 2014 results on May 1. Last
quarter, the company posted a positive earnings surprise of
17.5%. It is also worth noting that OpenTable has outperformed
the Zacks Consensus Estimate in all the four preceding quarters
with a positive earnings surprise average of 18.29%. Let us see
how things are shaping up for this announcement.
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Growth Factors This Past Quarter
We believe that the strong growth in mobile user base and
expansion in the overseas markets will boost OpenTable's top-line
growth. Additionally, continuing investments in marketing
activities will boost traffic. However, these investments will
keep margins under pressure in the near term.
It is also noteworthy that, the company has launched a mobile
payments service in San Francisco on a pilot basis, which will
help diners to pay for the meal. We believe that strategic
initiatives such as these coupled with recent acquisitions will
boost OpenTable' financial position, going forward.
However, competition from
) and the speculated entry of
) into the restaurant reservation business may increase
competition for OpenTable.
Our proven model does not conclusively show that OpenTable will
beat earnings this quarter. That is because a stock needs to have
both a positive
and a Zacks Rank #1, 2 or 3 for this to happen. That is not the
case here as you will see below.
Both the Most Accurate estimate and the Zacks Consensus Estimate
stand at 31 cents. Hence, the difference is 0.00%.
OpenTable's Zacks Rank #3 (Hold) when combined with a 0.00% ESP
makes surprise prediction difficult.
We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated
stocks) going into the earnings announcement, especially when the
company is seeing negative estimate revisions momentum.
Other Stocks to Consider
Here is another company you may want to consider as our model
shows that it has the right combination of elements to post an
earnings beat this quarter:
ON Semiconductor Corp.
) has an Earnings ESP of +6.67% and holds a Zacks Rank #1 (Strong