LinkedIn Corp LNKD capped off a horrendous week with a 43.6 percent decline on Friday after a major earnings miss spooked the market. Unfortunately, CNBC analyst Jim Cramer believes that the stock’s freefall may not be over yet.
“You have a stock in free-fall where sellers will take it as low as they want because they don’t have any way to value it anymore,” Cramer explained.
LinkedIn’s Q1 2016 earnings guidance of $0.55/share on revenue of $820 million came in well short of consensus expectations of $0.74 EPS on $866 million in revenue.
Cramer said that the market selling pressure on high-growth stocks may not yet be at an end.
“Many individual stocks were annihilated beyond all reason, just laid to waste, and maybe they still haven’t found a bottom.”
Perhaps LinkedIn shareholders can take some comfort in the fact that, on a day where the NASDAQ fell 3.2 percent, at least LinkedIn wasn’t the only big-name double-digit loser on the day. Tableau Software Inc DATA declined an astounding 49.4 percent and salesforce.com, inc. CRM fell 12.9 percent.
Cramer believes the United States is currently in the middle of a “rolling bear” market, and that high-growth tech names are being de-valued in favor of solid high-dividend stocks like Verizon Communications Inc. VZ.
Disclosure: The author holds no position in the stocks mentioned.
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