Sell-side cuts LinkedIn PTs post-earnings, but remains bullish

|About: LinkedIn (LNKD)|By:, SA News Editor

Unlike Twitter, LinkedIn (LNKD -7.3%) hasn't seen any downgrades after providing disappointing guidance and site traffic data to go with a Q4 beat. 13 firms have cut their PTs, but their targets all remain at $225 or higher. Meanwhile, SunTrust has upgraded shares to Buy.

SunTrust's Robert Peck notes the midpoint of LinkedIn's 2014 revenue guidance range implies a 20% drop in revenue growth from 2013's 57% clip, a decline he considers "excessive" in light of the launch of new products such as sponsored news feed ads and Sales Navigator. LinkedIn has a long history of lowballing its revenue guidance.

Morgan Stanley thinks LinkedIn's margins could be "flattish" in 2014, but also believes improving ad sales and the rollout of LinkedIn's sales products could yield revenue upside. In spite of the traffic data, Needham remains confident LinkedIn's investments in creating a "richer experience" for users will yield higher engagement.

LinkedIn mentioned on its CC (transcript) unique visiting members rose 31% Y/Y in spite of the site traffic slump, thanks in part to mobile growth, and that member page views rose 40%.

Corporate customers under contract rose 11% Q/Q and 49% Y/Y to over 24.5K; CFO Steven Sordello admits much of the new account growth now involves smaller clients, but adds ARPUs for larger clients are growing due to product cross-selling. To keep up its momentum, LinkedIn plans to grow its salesforce by over 30% in 2014.

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