LinkedIn Is Making New Connections

Aug.12.14 | About: LinkedIn (LNKD)

By Carly Forster

Social media can be a huge asset in finding a quality job in today's career market.

LinkedIn in the News

LinkedIn (NYSE:LNKD) is a Mountain View, California based social networking website primarily used for business-oriented professional networking. The company released its second quarter earnings report on July 31st and its results revealed an unexpectedly fast revenue growth. The sudden increase is likely due to LinkedIn's revamped version of its Sales Navigator software. This new sales initiative will scan the 313 million user LinkedIn database to make suggestions to salespeople on possible customers, as well as help them discover mutual connections in order to get introductions.

A Financial Expert's Opinion

On August 1st, Cantor Fitzgerald analyst Youssef Squali maintained a BUY rating for LinkedIn with a $250 price target. He noted, "Sustainable growth in corporate customers and ARPU, strong user growth/engagement and new products roll out should continue to drive outsized revenue growth/margin expansion over time." Squali has made seven recommendations on LinkedIn, with a 60% success rate, earning him a +6.2% average return on the stock.

Squali's Past Recommendations

Squali has a history of making recommendations for social media stocks, such as Twitter (NYSE:TWTR) and Facebook (NASDAQ:FB), helping him earn an overall +32.1% average return on all stocks, a 78% success rate in making recommendations, and the number 4 ranking out of 3203 analysts on TipRanks.

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On May 29th of this year, Squali upgraded his rating for Twitter from HOLD to BUY with a $40 price target. He reasoned, "While impossible to pinpoint the trough for a stock in free fall, we currently see more upside than downside in TWTR." Since then, Twitter has gone up from $34.00 to $43.47, helping Squali earn a +24.0% average return on the stock.

In addition, on June 24th of this year, Squali reiterated a BUY rating for Facebook with an $80 price target. He explained, "With video becoming increasingly important in the News Feed and initial monetization efforts well underway, we view Facebook's announcement about changes to its video rankings favorably and as a precursor to a ramp in monetization. We continue to believe that video ads could generate $1B + of revenue for FB within a few years." Since then, Facebook has gone up from $65.72 to $73.51, helping Squali earn a 58.7% average return on the stock.

However, Squali has not always been so lucky with his recommendations. On April 30, 2010, Squali maintained a BUY rating for VistaPrint (VPRT) with a $70 price target. He acknowledged that the printing company's Q4 forecast of that year was disappointing because of increased investments and a drag from foreign currency, yet he still maintained a BUY. Since then, VistaPrint has gone down from $51.58 to $48.31, attributing to Squali's -12.3% average return on the stock.

Conclusion

Squali sees the importance of social media in today's market and thinks now is the time to invest. Would you trust his latest recommendation based off of his financial advice history?