What to Expect From LinkedIn Earnings

Linkedin Corp. (NYSE: LNKD) is scheduled to report its fourth-quarter financial results after the markets close. The consensus estimates from Thomson Reuters call for $0.78 in earnings per share (EPS) on $857.59 million in revenue. The same period from the previous year had $0.61 in EPS on revenue of $643.43 million.

LinkedIn is known as one of the best companies to work for. It continues to dominate the interconnecting of business professionals, with well over 300 million members worldwide, but uneven earnings and some corporate missteps have turned the stock into a volatility victim. An improving economy and demand for highly skilled workers have provided the impetus for earnings surprises.

The new Sales Navigator product, launched last year, is doing well, and LinkedIn has ramped sales, selling the product to well over 200 at this point, with field sales having an increasingly rising impact. Field sales accounted for almost 50% of bookings in the second and third quarters and almost 50% of revenue. In addition, last year most Sales Navigator revenue and bookings were generated on a self-serve basis.

With little threat of competition to the company’s Talent Solution segment, and the rise of the Sponsored Updates along with auction-pricing dynamics and rising member engagement in Marketing Solutions, and emerging growth for Sales Navigator in Premium Subscriptions, RBC feels everything is full speed ahead for 2016.
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A few other analysts weighed in on Linkedin prior to the release of its earnings report:

• Barclays has a Buy rating with a $265 price target.
• Nomura reiterated a Buy rating with a $235 price target.
• SunTrust reiterated a Buy rating with a $250 price target.
• Credit Suisse reiterated an Outperform rating with a $330 price target.

So far in 2016, Linkedin has underperformed the broad markets, with the stock down 15% year to date. Over the past 52 weeks, the stock is down nearly 18%.

Shares of Linkedin were trading up 0.7% at $192.53 on Thursday, with a consensus analyst price target of $277.40 and a 52-week trading range of $165.57 to $276.18.