Praise rolls in for LinkedIn's Q2 results, long-term opportunities

"We believe the long-term trajectory of existing businesses and the opportunity represented by emerging businesses like Sales Navigator ... remain among the strongest in Internet," writes Goldman, reiterating a Buy on LinkedIn (LNKD +9%) and upping its target by $20 to $250.

The firm sees jobs and product sales benefiting from mobile and native ad growth, and thinks strong growth justifies a steep valuation of 21x 2015E EV/EBITDA.

4 other firms have also hiked their LinkedIn PTs. Among them is SunTrust (PT raised to $240), which declares LinkedIn "uniquely positioned to create a [cloud app platform] for professionals." The company just rolled out a standalone version of its Sales Navigator product (has a separate login) that adds a number of features requested by sales pros.

Many analysts are pleased LinkedIn added 2.2K+ Talent Solutions accounts in Q2, up from Q1's disappointing 1.4K and bringing the total base to 28.1K. Also going over well: Cumulative members rose 6% Q/Q and 32% Y/Y to 313M. On the other hand, unique logged-in visitors only rose 3% Q/Q and 13% Y/Y to 84M; total unique visitor count is at 186M (per comScore).

Q2 results, guidance/details

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Comments (6)
  • PeterScriabin
    , contributor
    Comments (364) | Send Message
    One reads that their GAAP earnings actually fell Y/Y (ie. comparing Q2s), and are now negative. As with CRM, revenue increase rates are fully matched by cost increase rates.


    There were no special charges that would justify considering non-GAAP, instead of GAAP, earnings - only the usual relentless and massive march of stock-based compensation expenses (AKA "wages and salaries") and amortizaion of intangible assets (AKA 'non-accretive acquisitions").


    If you follow fashion and ignore GAAP, the PPS is STILL 100x non-GAAP "earnings". Why is everybody gaga over this stock?


    Can some Long please explain this to me - because I am tired of bruising my chin on the desktop, as my mouth sags open in disbelief at the valuation and the cooing, fawning analysts.
    1 Aug 2014, 02:12 PM Reply Like
  • Darren McCammon
    , contributor
    Comments (4326) | Send Message
    They think it is a great business, with huge opportunity for more growth, true. That its the next Cisco or Google, maybe. That the extremely high multiple are justified as profits will double each year for the next decade, unlikely.


    LNKD is like TSLA, a great business with huge potential priced for perfection. As long as they keep up excellent performance, and the market stays positive, and there are no major hiccups, and there is no meaningful competition, and the employment picture continues to improve, and they can realistically promise higher margin shared with investors in the future, the stock will go up. However, when (and I mean when) something negative happens, when they are less than perfect and the opinions change, or when overall market sentiment just falls, then the stock will tank.


    It's a reasonable short if you know the timing of some unexpected future negative event (and aren't trading based on insider knowledge) or if you have a small enough position that it doubling before it declines 75% is acceptable.


    Disclosure - short LNKD and TSLA
    1 Aug 2014, 02:35 PM Reply Like
  • maximumvalues
    , contributor
    Comments (620) | Send Message
    I bought LNKD puts today as a more fair value is $170 and this move only makes the forward earnings expectations a 70x price at $170 and this seems bubbly enough considering their are always risks pricing a stock out a year when we don't know who is coming up with competitive products next. Considering, it is just a website that most anyone can create.
    1 Aug 2014, 06:22 PM Reply Like
  • troul
    , contributor
    Comments (20) | Send Message
    "Considering, it is just a website that most anyone can create." really? I design websites maybe I'll make a copycat and hope to pull 1.6B in revenue by next year.
    1 Aug 2014, 07:48 PM Reply Like
  • C.N
    , contributor
    Comments (263) | Send Message
    Greylock Partners- stay away from shorting stocks associated with Greylock partners... exploits go all the way to Carter 2.0, it is manipulation, and they cannot be stopped. Carter 2.0 always in San Fran for capital raising.
    1 Aug 2014, 08:52 PM Reply Like
    , contributor
    Comments (103) | Send Message
    Still a bubble.
    2 Aug 2014, 11:21 AM Reply Like
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