Down $75 LinkedIn Still Remains Undiscovered

Steve Kanaval |

Shares of LinkedIn (LNKD) tweaked guidance and is taking a 40% hit testing levels not seen for this cool tech stock since 2012 trading at $112 down near $75 in early morning action. It is ironic to me that LinkedIn still remains outside the "big four" social media stocks. Few know who the CEO is and coverage by media is so distant from FANG stocks it has always puzzled me. This is a great company and a useful tool remaking the way we communicate with our business relationships. The question here is how it's audience is shifting and why analysts are asking if the company has skill in making acquisitions and integrating them.

LinkedIn reported Q4 revenue of $862 million, topping the consensus estimate of $857.6 million and up 34% from the year-earlier quarter. The networking site for professionals reported earnings per share minus items of 94 cents, soundly above the consensus estimate of 78 cents, as polled by Thomson Reuters.

LinkedIn estimated Q1 revenue guidance at $820 million, well below the consensus of $866.8 million. It projects EPS of 55 cents, below the consensus of 74 cents. During the conference call, LinkedIn acknowledged that a reshuffling of product strategy will impact short-term revenue growth in favor of the long term.

“We’re making good progress on our initiatives,” LinkedIn CFO Steve Sordello said in the conference call. “Our focus is on investing intelligently to capture the large, addressable opportunity ahead of us.”

The earnings came at a challenging time for LinkedIn as it digests an acquisition and undergoes a workforce rebalancing, while also introducing new products. In December, LinkedIn rolled out its new mobile app, Voyager, designed to be faster and more intuitive for users. In April, LinkedIn paid $1.5 billion for, a video training website. LinkedIn said Q4 revenue from, which it puts in the category of Learning & Development, was $48.6 million, up 18% from the previous quarter.

“We enter 2016 with increased focus on core initiatives that will drive leverage across our portfolio of products,” LinkedIn CEO Jeff Weiner said in the conference call after earnings posted.

The business social network ended Q4 with 414 million members, up 19% from the year-earlier quarter and up 18 million from Q3. It topped the consensus estimate of 409 million.

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