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Summary

  • LinkedIn Corp. is set to report FQ2 2014 earnings after the market closes on Thursday, July 31st.
  • This quarter 62 contributing analysts on Estimize.com have come to a consensus earnings expectation of 40c EPS and $514.81M in revenue.
  • Contributing analysts on the Estimize.com platform are forecasting that on Thursday LinkedIn will earn a penny per share more than Wall Street is predicting and beat the Street's revenue consensus by $3 million (<1%).

LinkedIn Corp. (NYSE:LNKD) is set to report FQ2 2014 earnings after the market closes on Thursday, July 31st. LinkedIn is the largest social network designed specifically for professionals and networking. So far this earnings season the social networks have been on fire. Facebook (NASDAQ:FB), Twitter (NYSE:TWTR), and Yelp (NYSE:YELP) all posted outstanding earnings relative to their own respective expectations. LinkedIn will be the next social network to report earnings, here's what investors are looking for.

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Source: Estimize.com

This quarter 62 contributing analysts on Estimize.com have come to a consensus earnings expectation of 40c EPS and $514.81M in revenue compared to a consensus of 39c EPS and $511.83M from Wall Street. Over the previous 6 quarters the consensus from Estimize.com has been more accurate than Wall Street in forecasting LinkedIn's revenue every quarter and more accurate in predicting EPS 5 times.

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Source: Estimize.com

LinkedIn's earnings have been extremely flat over the previous 4 quarters. This quarter there has been a huge uptick in social media companies' earnings, in large part due to a boost in mobile advertising revenue. The consensus from Estimize is still fairly modest this quarter compared to the great reports from the other social media companies. However the range of estimates from the community reaches particularly high this quarter. A wide range of EPS estimates is often indicative of uncertainty in the market, and could mean greater volatility post earnings.

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Source: Estimize.com

While LinkedIn's earnings may have flattened off, revenue has been increasing quickly and steadily. Over the past year, LinkedIn has been averaging year-over-year revenue growth of about 50%. Already this quarter we have seen breakout moves from Facebook, Twitter, and LinkedIn. The general trend is that social media platforms are starting to make a lot more money on their advertising businesses. The trend has been particularly pronounced on mobile as mobile engagement metrics have been soaring.

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Source: Estimize.com

Estimize.com ranks and allows the sorting of analysts by accuracy. The analyst with the lowest error rate on LinkedIn is an anonymous materials sector professional who goes by the username wjbuckner. Over 2 previously scored estimates on LinkedIn, wjbuckner has averaged an error rate of 2.0%. Estimize is completely open and free for anyone to contribute, and the base of contributing analysts on the platform includes hedge fund analysts, asset managers, independent research shops, non professional investors, and students.

The Estimize consensus was more accurate than the Wall Street consensus 65% of the time last quarter on the coverage of nearly 1000 stocks. A combination of algorithms ensures that the data is not only clean and free from people attempting to game the system, but also weighs past performance and many other factors to gauge future accuracy.

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Source: Estimize.com

Contributing analysts on the Estimize.com platform are forecasting that on Thursday LinkedIn will earn a penny per share more than Wall Street is predicting and beat the Street's revenue consensus by $3 million (<1%). The Estimize community is expecting LinkedIn to post year-over-year revenue growth of 42% while earnings increase by 2c per share compared to the same quarter of last year.

When LinkedIn reports after the close, reporting in-line with the Wall Street consensus will not be good enough. All of the other social media stocks are going crazy right now and LinkedIn will be expected to keep up.

Disclosure: None.

Source: Can LinkedIn's Earnings Keep Up With Facebook, Twitter, and Yelp?