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LinkedIn Corporation Message Board

  • investora2z investora2z Jun 15, 2013 8:16 AM Flag

    Difficult to make a fundamental case for this

    At present LinkedIn is looking very strong. The volumes indicate that the present momentum may continue for a while. The valuations do not seem to matter at all. Investors are not complaining as capital appreciation is what they pay for. However, it is good to be a little cautious as stocks do fall out of favor pretty quickly, and the nimble footed are able to get out with most of the profits. At present, it is one of the favorites amongst analysts who do not worry at all that the stock is trading at a forward P/E of 85. If one compares that with a trailing P/E of nearly 700, then the gap looks impossible to cover. The guidance at the last earnings also indicates that the stock may take a lot of time to bridge this gap. Analysts are more comfortable with LinkedIn than some other social networking companies because it is not solely dependent on ad revenues. There is lesser competition in the professional networking space, and the 218 million users base has a good monetizing potential. For the other social networking companies, competition is more. Yahoo is getting more aggressive, and apart from acquisitions (like Tumblr), it is also looking at other segments like online gaming / fantasy sports /wagering. Even Comcast and MGT Capital Investments (MGT) are increasing their presence in this segment. The problem with LinkedIn's future outlook painted by some analysts is that it perhaps factors a largely optimistic scenario. While it is surely going to do well in the future, there is also a likelihood of headwinds from known and unknown quarters. There can also be slippages in earnings, which may make it more difficult for the fundamentals to catch up with the price. In any case, one can tag along till the tide turns, but the fundamentals are not at all convincing.

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    • Have some vision. 3-5 years from now - LNKD will own recruiting space period. Why use Taleo or any applicant tracking system other than LNKD. They will build a SaaS platform that does all applicant tracking, owns all the resumes, manages the connections between people and improves upon them, employer and employee will benefit from LNKD services. This company has massive global potential - could be a 5-10 bagger from here... IMHO

      Also understand the skepticism because the stock looks very expensive today ... LNKD could end badly ... but i don't think it will. Money on LNKD

      Sentiment: Strong Buy

      • 2 Replies to fotzeschlagen
      • A 5 bagger would make this company worth almost $100 billion. What makes this company worth $100 billion? Do you really think in 5 years this company will be earning $6-8 billion net?

        Personally, I think it's a pipe dream. I think it's ridiculous that investors would consider this company today to be worth $20 billion. Getting users on the network is not the same as generating revenue and generating revenue is not the same as generating a profit.

        I don't short stocks but I don't like seeing average investors buying stocks on potential alone with no history of earnings or cash flow that justify a certain price on the market.

      • avb911t Jun 16, 2013 11:34 AM Flag

        You know more than Lnkd insiders, all told they sold for $1.6 Billion profit.
        The total recruiting space worldwide is worth no more than $3 Billion and lnkd
        owns the SPAMMING space and nothing else. Some 10 Billion SPAMs per week.

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