OpenTable Inc.'s shares fell Thursday after the online restaurant reservation site's stock was downgraded by Morgan Stanley.
THE SPARK: A group of Morgan Stanley analysts downgraded the company's rating to "Underweight," saying the company's success in luring diners to use its service has already been priced into the stock. The analysts did say in a research note that the company's recent gains in diners who used the service made them more optimistic about its near-term revenue outlook.
THE BIG PICTURE: OpenTable reported in August that its second-quarter profit jumped 46 percent on to beat market expectations, helped by improved revenue. But the company gave a disappointing forecast for the rest of the year.
The company also announced in August that it would expand its business through the acquisition of the reservation-management system of Urbanspoon, which is owned by IAC/InterActiveCorp.
THE ANALYSIS: The analysts said OpenTable has shown encouraging growth in the number of seated dinners, an industry measure of the number of people using its service. But the analysts believe that the market has already priced in that success and that there is little room for the company to improve. The analysts have a $60 price target on OpenTable shares.
SHARE ACTION: Shares fell $2.54, more than 3 percent, to close at $73.99. Its stock price is up more than 69 percent since this time last year.