Wunderlich Sees Growth Ahead For LinkedIn

Wunderlich commented on LinkedIn Corp LNKD Friday and maintained a Buy rating and $250 price target.

Analyst Blake T. Harper indicated that the company “should be able to raise prices by single-digit percentages beginning in 2015 without much push back. We also have heard of positive comments from Sales Navigator customers and expect the business to have a strong ramp in 2015.”

LinkedIn's sales force is expected “to get traction with enterprise customers this year and for Sales Navigator to have a larger contribution in FY15 as it begins to address a $3-$5 billion market in the U.S.,” according to the analyst note.

Harper added that the “company is investing in and experimenting with going deeper in the enterprise” and had “an elevated investment schedule in 2015 due to data center buildout, new facilities, recruiting, and stock-based compensation.”

When LinkedIn reports Q4 earnings on February 5, Harper expects the company to report “slightly above” consensus and conservative 2015 guidance.

The stock is trading at 8.6x EV/S, 32x EV/EBITDA, and 77x P/E based on the firm's 2015 estimates, Harper estimated growth at 38 percent, 42 percent, and 45 percent year-over-year, respectively.

LinkedIn traded at $230.20 in the premarket, up 2.34 percent.