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Mon, Feb. 8, 10:35 AM
- Andrew Left, head of Citron Research (much better known for its short positions than its long positions), has told CNBC he took a long position in LinkedIn (LNKD +2.7%) on Friday, after shares nosedived due to the professional social networking leader's soft Q1/2016 guidance.
- Left: "Only buy stocks that you are willing to buy lower. That is the lesson. I am happy (with the drop) ... There are great companies that I couldn't own for years because of their price, and now I finally have a chance to be an investor. LinkedIn is one of them."
- LinkedIn is higher in spite of a 2% Nasdaq drop. Shares are still down 42% from last Thursday's close.
- Prior LinkedIn coverage
- Prior Citron Research coverage
Fri, Feb. 5, 2:26 PM
- Atlantic Equities, BMO, Cowen, JPMorgan, Mizuho, Monness Crespi, Raymond James, RBC, SunTrust, and Susquehanna have downgraded LinkedIn (NYSE:LNKD) to neutral ratings after the company offered weak Q1/2016 guidance with its Q4 beat, and suggested several factors related to hiring solutions, online ad, and subscription growth were to blame. Shares have crashed to levels last seen in 2012.
- Raymond James' Justin Patterson, who previously had a Strong Buy rating: "While guidance likely contains some conservatism, LinkedIn’s now provided cautious guidance for three of the past four quarters and earnings quality is poor (i.e. [stock compensation[ now represents >60% of EBITDA, with revenue growth decelerating). Thus, we believe the after-hours reaction is warranted and that LNKD shares are likely range-bound until growth reaccelerates, guidance volatility subsides, and earnings quality improves."
- Citi's Mark May (Neutral): "While 4Q15 results could be characterized as mixed, three of the last four quarters have now included ‘issues’ ... Even considering mgmt’s history of conservatism, guidance implies a meaningful deceleration in revenue growth to the 20-30% range from 35-40% recently, as well as 30% incremental margins for 2016, below the 32% incremental margins in 4Q15."
- Pac Crest's Evan Wilson (Overweight rating): "LinkedIn has rarely given investors a reason to own the stock in 1H and it has happened again ... we think its outlook will most likely end up being conservative as it usually is. We think for its data alone, LinkedIn is a worthy acquisition for any number of enterprise software companies at this valuation." Wilson is, however, critical of LinkedIn's decision to shutter its standalone Lead Accelerator B2B ad product. "Now Sales Navigator really is LinkedIn's only big near-term opportunity to materially increase the monetization of its data set. Ugh."
- BMO's Dan Salmon: "[W]e came away from 4Q results with less confidence in our long-term thesis. Moreover, while US employment trends are still relatively strong, an uncertain air surrounding near-term hiring appeared to develop toward year-end ... Looking more closely at the long-term product roadmap, the path to engaging new groups of power users (B2B marketers, salespeople) has been bumpier than expected."
- Stifel's Scott Devitt (Buy, $220 target) is still a believer. "Investors may question its strategy, but LinkedIn is narrowing its focus on high value, high impact initiatives and jettisoning those investments that do not provide acceptable returns. Although its marketing business will likely face distractions this year, we think LinkedIn’s talent, sales, and learning & development businesses are poised for a strong year."
- As is Needham's Kerry Rice (Buy, $200 target): "[W]e believe our estimates could prove conservative due to: 1) LNKD’s core products remain healthy; 2) LNKD continues to have a strong product pipeline, including Lynda and Sales Solutions, the full potential of which we believe is yet to be realized; and 3) management continues to stay focused in terms of both execution and resource allocation."
- Prior LinkedIn coverage
Fri, Feb. 5, 12:40 PM
Fri, Feb. 5, 9:17 AM
Thu, Feb. 4, 5:39 PM
Thu, Feb. 4, 5:30 PM
- While discussing its 2016 guidance, LinkedIn (NYSE:LNKD) says it expects its field sales hiring solutions business to see mid-20% growth in 2016, after exiting 2015 at 30% growth. The outlook is said to reflect "continued pressure in EMEA and APAC given current global economic conditions," and single-digit growth for self-serve products. It also doesn't assume "meaningful contribution" from LinkedIn's Referrals and new Recruiter products.
- Also: For its Marketing Solutions (ad) business, LinkedIn is shuttering its Lead Accelerator product as a standalone offering, and incorporating its technology into the Sponsored Updates ad product. The move is expected to have a short-term revenue impact. Nonetheless, LinkedIn forecasts Marketing Solutions will "accelerate in 2016."
- Meanwhile, spending will stay aggressive: Capex will equal a high-teens % of 2016 revenue, and aggressive investments will be made for LinkedIn's Sales Solutions and Learning & Development (formerly Lynda.com) platforms.
- Q4 sales/traffic details: Talent Solutions revenue (62% of total) +45% Y/Y to $535M - hiring revenue +32% to $487M, Learning & Development revenue totaled $49M. Over 3K corporate solutions accounts were added, raising the total above 42K (+29% Y/Y); LinkedIn won't disclose this metric going forward. The add-on/renewal rate "decreased moderately" Y/Y.
Marketing Solutions +20% to $183M, with Sponsored Updates surpassing 50% of segment revenue and display ad sales dropping by a high-30s % amid ongoing "secular-driven headwinds." Premium Subscriptions +19% to $144M, with Sales Navigator providing a lift. LinkedIn notes general subscriptions are now growing only at a single-digit rate as subscribers migrate to products such as Job Seeker and Recruiter Lite.
Registered members rose by 18M Q/Q to 414M. Unique visiting members only rose 7% to 100M (57M mobile). Member page views +26% to 37B. The U.S. was 61% of revenue.
- Financials: 2015 free cash flow was $300M, up from just $21M in 2014. GAAP costs/expenses rose 39% Y/Y in Q4 to $877.9M. On a non-GAAP basis, sales/marketing spend was 31% of revenue, R&D 18%, G&A 11%, and cost of revenue 12%. LinkedIn ended 2015 with $3.1B in cash and $1.1B in convertible debt.
- In other news, LinkedIn has announced it's buying Connectifier, a startup that has developed A.I.-based search technology for helping recruiters find job candidates. LinkedIn, which bough job search engine/listing platform Bright in 2014, says Connectifier will "further strengthen our core products and accelerate our product roadmap, leveraging powerful machine learning-based searching and matching technology to help recruiters and hiring managers find the perfect talent fit."
- LinkedIn has tumbled to $139.46 after hours.
- LinkedIn's results/guidance, earnings release, slides (.pdf)
Thu, Feb. 4, 4:09 PM| Thu, Feb. 4, 4:09 PM | 51 Comments
Wed, Feb. 3, 5:35 PM
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Dec. 27, 2015, 2:33 PM
- Paris-based LinkedIn (NYSE:LNKD) rival Viadeo (OTC:VDESY) is pulling out of China, where (through its Tianji platform) it claims 25M of its 65M global registered users. The move is declared to be part of a "strategic refocusing" on France, where Viadeo has 10M registered users. (Press Release)
- Viadeo, which entered China in 2007, blames a capital shortage, its failure to find a local investor/partner, and "changing usage patterns" caused by the mobile shift. In addition to LinkedIn, the company has squared off against local firms such as Dajie and Wealink. Unlike the U.S. and various other locales where LinkedIn dominates, the Chinese professional social networking space remains fragmented.
- LinkedIn, for its part, stated in its Q3 report over 13M of its 400M+ registered users are in China, up over 3x since the company launched a Chinese-language site in early 2014. The figure still only equals ~2% of a Chinese Internet user base that officially totaled 668M as of June.
Oct. 30, 2015, 9:12 AM
Oct. 29, 2015, 7:53 PM
- LinkedIn's (NYSE:LNKD) Talent Solutions unit saw revenue rise 46% Y/Y in Q3 to $502M. The core Hiring (jobs) segment grew 34% to $461M (up from 32% in Q2), while Learning & Development (Lynda.com) contributed $41M in its first full post-acquisition quarter. Hiring accounts are near 40K; they were above 37K at the end of Q2.
- Marketing Solutions (ad) revenue rose 28% Y/Y to $140M, a slowdown from Q2's 32%. Sponsored update news feed ads (up over 100%) drove the growth, while premium display ads fell by a mid-30s %. Subscriptions revenue (premium memberships, Sales Navigator) rose 21% to $138M, after growing 22% in Q2.
- Traffic metrics: Cumulative members rose 20% Y/Y to 396M at the end of Q3, and have since topped 400M. Unique visitors rose 11% to an average of 100M/month, and member page views rose 33% to 38B (20% growth in page views/unique visitor). Mobile now accounts for 55% of traffic. China now has 13M+ members, up over 3x from early 2014.
- Financials: GAAP operating expenses rose 46% Y/Y to $816.3M. Op. margin (non-GAAP) was 18% vs. 13% in Q2 and 18% a year ago. Cost of revenue was 13% of revenue, sales/marketing spend 31%, R&D 19%, and G&A 12%. The U.S. was 62% of revenue, up from 60% a year ago. Forex had a 6% impact on revenue growth. Free cash flow was $73M, less than net income of $103M.
- LNKD +12.4% after hours to $243.60.
- Q3 results/Q4 guidance, PR, slides (.pdf), 10-Q filing
Oct. 29, 2015, 5:36 PM
Oct. 29, 2015, 4:05 PM
- LinkedIn (NYSE:LNKD): Q3 EPS of $0.78 beats by $0.32.
- Revenue of $779.6M (+37.2% Y/Y) beats by $23.96M.
- Expects Q4 revenue of $845M-$850M and EPS of $0.74, above a consensus of $845.9M and $0.67.
- Shares +7.8% after hours.
Oct. 28, 2015, 5:35 PM
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Oct. 15, 2015, 6:55 PM
- LinkedIn (NYSE:LNKD) has previewed a revamped version of its core mobile app (set to launch in the next few weeks) that features a simpler/streamlined UI, faster search, and an overhauled news feed that tries to weed out content users are less interested in. Better messaging and notification tools are also included, as are A.I.-driven features that recommend content and surface connections between users.
- Though LinkedIn has said it received 52% of its traffic from mobile as of Q2, the company's mobile engagement still easily trails that of most other social networking platforms. Evercore (citing comScore data?) states only 17% of time spent on LinkedIn by U.S. users is through the mobile app (compared with 76% for Facebook), and that 63% still involves PCs.
- LinkedIn's apps currently have ratings of 3.5/5 on the App Store and 4.2/5 on Google Play. In early September, LinkedIn rolled out a revamped messaging system.
- Q3 results arrive on Oct. 29.
Sep. 16, 2015, 9:57 AM
- "[A]fter several quarters of significant sell-offs, with the stock declining ~30% since its well-received Q4b 14 earnings report, reduced FYb 15 guidance ex-[Lynda.com], somewhat reset investor expectations, lessening headwinds to Marketing Solutions from secular shifts in advertising, as well as guidance and valuation more accurately incorporating slower growth, we are moving to the sidelines with our Hold rating," writes Brean's Sarah Hindlian. Her fair value estimate is $184.
- Hindlian adds several of her concerns "have largely played out," with the Sales Navigator social selling platform proving "a disappointment" and LinkedIn's (LNKD - unchanged) core Talent Solutions (jobs/recruiting) growth slowing on account of high penetration of "price insensitive" enterprises.
- She started LinkedIn at Sell on March 16, when shares were at $260.17 (33% above current levels).
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