No Reservations About OpenTable

James Dobson, an analyst for The Benchmark Company, raised his rating on shares of OpenTable (NASDAQ:OPEN) from Hold to Buy yesterday with a $50 price target. This morning, he responds to an article by the San Francisco Chronicle’s Casey Newton, who says that Urbanspoon (NASDAQ:IACI), a competitor to OpenTable, is seating one million diners per month using its automated reservation system.

Urbanspoon has just 11 percent of OpenTable’s volume, with OpenTable at 27.8 million in the first quarter. Dobson points out that Urbanspoon probably had just 1,200 restaurants signed up officially at the end of last year, which makes up only 7 percent of OpenTable’s 17,150 restaurants signed in North America in 2011.

Dobson writes, “We don’t believe any domestic competitor poses a significant financial threat to OpenTable, and OpenTable’s scale and network effects are currently underappreciated by the stock market.”

To contact the reporter on this story: Lindsey Grossman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com