LinkedIn Shares Extend Gains; Analysts Dismiss Outlook
LinkedIn Corp (NYSE: LNKD) extended its gains Friday on strong quarterly results while analysts widely dismissed a disappointing outlook as "conservative."
The Mountain View, California-based company's shares closed Friday at $263.40, up more than 10 percent.
Cantor Fitzgerald's Youssef Squali maintained a Buy rating and boosted his price target nearly 10 percent to $280, citing "strength across all segments."
LinkedIn, which consistently beats quarterly earnings estimates, predicted adjusted profits for the current first quarter of $0.53 a share, on revenue of $618 million to $622 million.
But Squali called the outlook "conservative" and expects "outsized revenue growth" over time.
"Management tends to be conservative" in its financial guidance, according to Sterne Agee's Arvind Bhatia, who maintained a Neutral rating on valuation.
But SunTrust's Robert C. Peck boosted his target more than 14 percent to $275, maintaining a Buy rating.
Peck noted that growth in premium subscriptions was hurt in the recent period by "free trial" promotions, but said prospects for sales to business of LinkedIn's Sales Navigator and Talent Solutions products look promising.
Additional spending on expanding the company's sales staff suggests opportunity, "but also a more complex sales process" relative to traditional recruiting products, Peck said.
Squali concluded by mentioning that the company's outlook "looks conservative."
Analysts, on average, expect earnings of $0.55 a share on revenue of $646 million.
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