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Analysts Bullish on LinkedIn Prior to Q2 2013 Earnings Report *UPDATED*

  +Follow August 1, 2013 9:14AM
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LinkedIn Corp (LNKD) has carved out an interesting niche for themselves, combining the personal and the professional as a social media company centered around people’s non-social work lives. The networking company, which connects users via the professional connections, has amassed over 225 million users. And, of interest to investors, has beaten earnings expectations all eight quarters since the company went public.

Following the recent success of Facebook Inc (FB) Wall Street has renewed faith in social media’s ability to capitalize on the growing shift to mobile. Year-over-year ad revenue for LinkedIn grew 56 percent from Q1 2012 to Q1 2013.

Unlike Facebook, LinkedIn isn’t nearly as dependent on ad revenue to stay afloat. The company only gets around a quarter of their revenue via advertising. The lion’s share of LinkedIn’s revenue comes from selling greater amounts of access to its vast stores of information it has on users. As LinkedIn's social media experience is centered around the user's professional careers, participants routinely post resumes, work histories, skill sets, and endorsements on their profiles. LinkedIn, in turn sells this information to corporate recruiters – and also to other users via the LinkedIn Premium feature.

The fact the company, unlike most social media, has three different sets of revenue streams – advertising, user subscriptions, and information sales – has excited investors ever since the company first went public. LinkedIn had its IPO on May 11, 2011 at $45 a share. Investors rushed to buy in, and the stock skyrocketed, closing that day up 109 percent over its IPO value, at $94.25.

Despite its seemingly untenable string of successful quarters, many analysts remain very bullish on the stock. BGC Partners analyst Collin Gillis likes the comapny, and pegs LinkedIn to announce an increase of 15 million users over the prior quarter to bring their total user base to 240 million. In a reserach, RBC Capital Markets snalyst Mark Mahaney enthused  "LinkedIn is firing on all cylinders... (their) fundamentals are the strongest of any large-cap Internet stock." And Wunderlich raised thr price target on the stock from $205 to $225.

Of 29 analysts surveyed by NASDAQ, all 29 held at least a "hold" rating on the stock, with 15 giving the stock a "strong buy."

Prior to the Q2 2013 earnings announcement, the stock was up .6 percent on the day and 79.82 percent on the year to hit $203.79 a share. The stock experienced a slight correction in May following the Q1 2013 earnings report due to (at the time) pessimistic expectations for the rest of the year.

 

***UPDATE***

LinkedIn made it nine quarters in athat they beat analyst expectations, but this good news was tempered by a gloomy outlook going forward. The company appears to be nearing saturation with white-collar workers in the US, and needs to expand more aggressively into other markets or make their site more of a "media destination" to spur growth. That is, the company needs some kind of news feed, or blogging function, to get users to check in more frequently.

62 percent of their total revenue currently comes from customers in the US.

 

LinkedIn had net income of $44.5 million, or earnings of $0.38per share on revenue of $363.7 million, compared to the prior-year period during which the company made $18.1 million, or $0.16 per share. Analysts had expected earnings of $0.31 per share on revenue of $354 million.

 


 

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.


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TradingBad
31 Oct 14 07:26:29
$LNKD short 230
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31 Oct 14 07:26:04
$GPRO and $LNKD look very sensitive to #BOJ decisions! +15% both!
DSquaredx3
31 Oct 14 07:25:59
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31 Oct 14 07:24:48
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31 Oct 14 07:24:19
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31 Oct 14 07:22:49
RT @timothysykes: http://t.co/16ylOSoz6U I LOVE dip buying earnings winners $FB $TWTR $LNKD too easy thanks $WETF
$1,000 Swing Trader
31 Oct 14 07:22:28
RT @Financialtailor: $LNKD still losing money, but investors are excited for some reason. $FB and $TWTR not feeling the love today.
Timothy Sykes
31 Oct 14 07:22:10
http://t.co/16ylOSoz6U I LOVE dip buying earnings winners $FB $TWTR $LNKD too easy thanks $WETF
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31 Oct 14 07:20:28
RT @StockTwits: $LNKD LinkedIn has just broken through the $220 market in pre-market trading. http://t.co/N21XByfCPY
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31 Oct 14 07:18:40
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$LNKD - MARKET SNAPSHOT: U.S. Stocks: S&P 500, Dow Hit Record Levels http://t.co/chotbnXczb
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Day Trades: Long $GPRO, $LNKD, $DGLD, $NKDZ14, $SPZ15, $NDZ14. Short $GCZ14
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31 Oct 14 07:17:10
RT @StockTwits: $LNKD LinkedIn has just broken through the $220 market in pre-market trading. http://t.co/N21XByfCPY
leahanne
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31 Oct 14 07:10:40
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31 Oct 14 07:10:13
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31 Oct 14 07:08:28
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31 Oct 14 07:06:11
LinkedIn $LNKD Stock Surges After Third-Quarter Earnings Beat http://t.co/PDWU05GGlr
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31 Oct 14 07:04:39
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31 Oct 14 07:03:23
RT @LinkedIn: We’re tweeting our 3rd quarter 2014 earnings call on @Stocktwits. Join us: http://t.co/aYKq20TAqg $LNKD
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31 Oct 14 07:02:56
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Jon Boorman, CMT
31 Oct 14 07:02:33
RT @LDrogen: As expected, $LNKD showing great post earning drift after handily beating Estimize top and bottom line http://t.co/5W8s9p6zVO
PsychSignal
31 Oct 14 07:01:28
57.0% increased bullish conversations in $LNKD in the past 1 hour.
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31 Oct 14 07:00:23
@72olds Very bullish social score for $LNKD - Compete in trading games and see what top traders are saying! https://t.co/7r5j5gEv6j
elementalone
31 Oct 14 07:00:14
RT @CBOE: Actives on open @CBOE: $AAPL $FB $C $GILD $ATML $LNKD $TSLA $MA $CLSN
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31 Oct 14 07:00:02
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31 Oct 14 06:58:07
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ActiveVols
31 Oct 14 06:58:04
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31 Oct 14 06:57:39
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RT @CBOE: Actives on open @CBOE: $AAPL $FB $C $GILD $ATML $LNKD $TSLA $MA $CLSN
				
				
  +Follow August 1, 2013 9:14AM
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