LNKD reports on Thursday. A preview:
LinkedIn Q1 Earnings Expected To Continue Growth Mode
BY BRIAN DEAGON, INVESTOR'S BUSINESS DAILY
Wed, Apr 29 2015
On the heels of its largest acquisition, LinkedIn (NYSE: LNKD) is set to report first-quarter earnings after the market close Thursday, with expectations of continued double-digit growth.
LinkedIn remains the dominant social network for professionals, deploying a steady flow of new products and upgrades for job seekers and recruiters.
The consensus estimate on Q1 revenue is $636 million, up 34% from the year-earlier period but the slowest growth in years. Earnings per share minus items are expected to rise 47% to 56 cents, according to the consensus estimate of analysts polled by Thomson Reuters.
LinkedIn received multiple price target hikes after reporting Q4 earnings on Feb. 6 that surpassed expectations, sending the stock to a new high of 274.19. It hit another new high of 276.18 on Feb. 26 and is looking to hit a buy point at 276.28 out of a flat base, though shares remain just below their 50-day moving average. The stock closed Tuesday at 257.34 and was set to open down a fraction on Wednesday. It remains an IBD Leaderboard stock.
Doug Anmuth, in a research report Tuesday, maintained an overweight rating on LinkedIn stock and a price target of 300: "LinkedIn remains one of our top picks as we believe the company has built a strong competitive moat in professional networking & talent acquisition/hiring, and it is one of the few names in our coverage to couple fast growth with margin expansion."
Membership Up 25%
LinkedIn ended Q4 with 347 million members, 15 million more than the prior quarter and up 25% from a year earlier.
For the current Q2, analysts estimate revenue at $717.2 million, up 34% from the year-earlier period, and EPS ex items of 74 cents, up 45%.
Acquisitions and overseas expansion are fueling growth. On April 9, LinkedIn announced it was buying Lynda.com for $1.5 billion in cash and stock, its largest acquisition to date. The deal will expand its ability to help workers enhance their job skills. Lynda.com provides a large library of online education courses and video covering business, technology and creative skills.
"The acquisition is synergistic, as it combines LinkedIn's reach and the data they have on the skills users have or need with Lynda's online learning platform," wrote Arvind Bhatia, an analyst with Sterne Agee, in a research report.
Youssef Squali, an analyst at Cantor Fitzgerald, rates LinkedIn stock a buy, with a price target of 280.
"We remain positive on LinkedIn, given the company's differentiated offerings, good execution to date, large addressable markets, and nascent but promising opportunity in sales and marketing solutions," Squali wrote in a research report Monday.
Follow Brian Deagon on Twitter: @IBD_BDeagon.
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