William Blair & Company Sees Significant Opportunity for LinkedIn Corp. to Grow in Emerging Markets

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In a report published Tuesday, William Blair & Company analyst Timothy McHugh reiterated a Market Perform rating on
LinkedIn Corp.
LNKD
. In the report, William Blair & Company noted, “A significant part of LinkedIn's long-term growth story is dependent on international expansion, but we believe that revenue per member differs significantly around the world, which makes estimating the conversion of international member growth into international revenue challenging for most investors. Management provided a more-detailed geographical membership breakdown in LinkedIn's most recent earnings release. To analyze the company's global growth opportunity a bit more closely, we combined that data with some historical disclosures and assumptions to look a little closer at what we believe revenue per member is in various regions. We estimate that revenue per member is in the $10-$12 range in fairly well-penetrated and developed economies (U.S., Northern Europe, and Australia, which we think collectively account for close to 80% of revenue) and $2 per member in less penetrated, but developed economies (southern Europe) and emerging markets. In our view, this demonstrates the significant opportunity for LinkedIn to grow in emerging markets over the long term and demonstrates that a handful of markets are likely to continue to drive most of the company's financial performance in the next few years.” LinkedIn Corp. closed on Monday at $234.81.
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Posted In: Analyst ColorReiterationAnalyst RatingsTimothy McHughWilliam Blair & Company
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