Why LinkedIn Stock is a Buy Right Now

One company providing an interesting investment opportunity after a major sell off is the professional networking giant LinkedIn Corporation (LNKD). The company saw its stock price dip after its second quarter earnings report dropping as far as 8% in after hour trading. However, the report actually contained several positives, both from Q2 and in regards to the rest of 2015.
 
LinkedIn currently holds a Zacks Rank #2 (Buy) thanks to both the positives found in the earnings report and encouraging estimate revision activity, further warranting attention for the stock at the moment. Below are several other reasons as to why LinkedIn holds value for investors right now and in the coming time.
 
Beating Estimates, Growing Revenue
 
In terms of earnings, LinkedIn posted EPS of -$0.30, which was better than the Zacks Consensus EPS Estimate of -$0.52. The company also beat the Zacks estimate for its revenue of $690 million, reporting actual revenue of $712 million for the quarter. LinkedIn’s reported revenue figure represented an increase of 33% compared to the same quarter last year.
 
Usage Growth
 
LinkedIn also reported several positive figures in terms of growth and usage for the company’s platform and Job Search App. Premium subscriptions, the website’s premium accounts that users pay for, produced revenue of $128 million, representing a year over year increase of 22%. The number of jobs posted on LinkedIn’s platform increased to nearly 4 million, compared to last year’s figure of 1 million. LinkedIn’s Job Search app surpassed the 3 million activations mark after reaching the 1 million activations mark in Q1.
 
Continued Increases in Engagement
 
One of the key stats that investors of LinkedIn watch for is member engagement. Total member growth is important of course, but it is also just as important that these new members and existing members continue to be engaged and utilizing LinkedIn’s platform. During the second quarter the company performed exceptionally well in this area, with member page views soaring 40% on 15% growth in unique visiting members.
 
Lynda.com Acquisition Adds Potential
 
LinkedIn also completed the acquisition of Lynda.com, an online learning company, this past May, and could see increased revenue growth in the near future because of it. Lynda contributed $18 million in revenue during Q2, but that number could be poised to grow in the coming months as LinkedIn continues to integrate the company into its operations.
 
Plenty of Opportunity in China
 
LinkedIn also holds great potential for growth internationally, but especially in China where the company’s base has more than doubled to over 10 million since February of 2014. That figure is only a fraction of the company’s total user base of 380 million members, leaving a great deal of room for further growth moving forward.
 
Bottom Line
 
Though trading near $190 currently, LNKD traded above $200 throughout June and July, and the current lower price could be a great buying opportunity for investors. LinkedIn is a stock that warrants consideration not only because of this lower-priced buying opportunity though, as the reasons listed above show that the company has the potential to continue, and expand on, the success it has already seen.
 
The demand for employment from individuals and the supply of jobs from companies will always be around, and as a useful and popular networking platform, LinkedIn stands to profit greatly as more and more individuals search for jobs via the internet, and as more companies turn to posting jobs and finding candidates online.
 
If LinkedIn’s management team stays focused on continued growth and remains committed to increasing shareholder value, the company could be a valuable piece of investment portfolios both in the short and long terms, and investors should be sure to have an eye on the stock.
 
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