Nomura Says Buy Shares Of LinkedIn

Analyst Anthony DiClemente mentioned that LinkedIn benefits from the “scale of data” it garners from its about 400 million members.

“With upgraded products including a new mobile app and an upcoming improvement to LinkedIn Recruiter, LinkedIn is poised to successfully leverage its scale advantage across three key segments,” DiClemente also noted.

Related Link: LinkedIn Stock Now Deserves A Higher Multiple, Says MKM's Sanderson

Hiring Solutions

For the Hiring Solutions business, DiClemente believes that there could be increased adoption of the revamped production line, along with additional penetration into smaller enterprises. Revenue growth in this segment inflected recently, indicating acceleration in revenue for the first time in five years.

According to the Nomura report, “A refreshed Recruiter product in 1Q16, penetration of the SMB market, and upselling of Media and Jobs products should support 25+ percent revenue growth for Hiring in the coming years.”

Marketing Solutions

For the Marketing Solutions segment, new mobile apps were expected to drive higher engagement, which in turn would drive success for Sponsored Updates. “LinkedIn’s release of its upgraded flagship app drives our optimism for rejuvenated success of the advertising business,” DiClemente stated.

In addition, DiClemente expects LinkedIn to leverage premium Lynda content in its Learning & Development business, to drive revenue growth for Talent Solutions.

“We expect this to continue, owing to the synergies between Lynda’s high-quality content and LinkedIn’s enterprise customers, as well as its professional user scale,” DiClemente added.