Market Overview

LinkedIn's Users, Engagement And Data Make It 'Significantly' More Valuable


LinkedIn Corp (NYSE: LNKD) reported its 1Q16 revenue and adjusted EBITDA ahead of expectations. Goldman Sachs’ Heath P. Terry maintained a Buy rating for the company, while raising the price target from $155 to $162. The analyst commented that although the company continues to struggle with execution issues, data related to users warrants a higher valuation.

LinkedIn reported its 1Q16 revenue at $861mn, representing 35 percent y/y growth, versus consensus estimate of $828mn. Adjusted EBITDA came in at $222mn, higher than the consensus expectation of $197mn.

Management raised its revenue and adj. EBITDA guidance for FY16 from $3.60-$3.65bn to $3.65-$3.70bn and from $950-$975mn to $985-1,005mn, versus consensus of $3.67bn and $984mn, respectively.

“While LNKD’s execution issues are far from solved by this quarter, we continue to believe that the value of the company’s network of users, their engagement, and the data that creates is significantly above the current valuation,” analyst Heath Terry wrote.

Upside Likely

The EPS estimates for 2016, 2017 and 2018 have been raised from $(2.76) to $(2.36), from $(0.30) to $(0.22) and from $0.64 to $0.69, respectively. “With upside to estimates still likely, a multiple below that of comparable subscription software companies, and heightened potential for M&A, we remain Buy rated,” Terry added.

Latest Ratings for LNKD

Jul 2016MaintainsNeutral
Jun 2016DowngradesOutperformSector Perform
Jun 2016DowngradesBuyNeutral

View More Analyst Ratings for LNKD
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Posted-In: Goldman Sachs Heath P. TerryAnalyst Color Long Ideas Price Target Reiteration Analyst Ratings Trading Ideas


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