Here’s What Hedge Fund Analysts Expect LinkedIn to Report
Leigh Drogen is CEO of Estimize, an open financial estimates platform which facilitates the aggregation of fundamental estimates from independent, buy-side, and sell-side analysts, along with those of private investors and students.
Founded in 2003, LinkedIn (LNKD) has quickly become an essential tool for many working professionals as a way to connect to not only employers but also friends on a professional level. Expected profit for the company for this quarter by Wall Street is $0.31 a share, which is up 45% from last year. However, after quarters of incredible growth, analysts are now expecting LNKD to finally begin slowing. After creating premium options on the site, a website for university students, and sponsored updates, LinkedIn might finally be slowing down. LinkedIn will be closely watched by analysts for what innovations it’ll be adding going forward.
LinkedIn is expected to report FQ3 2013 earnings on October 29th after the market close. The information below is derived from data submitted to the Estimize platform by a set of Buy Side and Independent analyst contributors.
The current Wall Street consensus expectation is for LNKD to report $0.31 EPS and $385.18M revenue while the current Estimize consensus from 31 Buy Side and Independent contributing analysts is $0.35 EPS and $387.74M revenue. The magnitude of the difference between the Wall Street and Estimize consensus numbers often identifies opportunities to take advantage of expectations that may not have been priced into the market. In this case, we’re seeing a greater differential between the Estimize and Wall Street numbers compared to previous quarters.
Over the past four months the Wall Street consensus trend for EPS has stayed the same at $0.31, while Wall Street revenue expectations have increased from $353.21M to $385.18M. The Estimize EPS and revenue consensus have fallen and risen, respectively, throughout the quarter with EPS going from $0.39 to $0.35 and revenue increasing from $358.93M to $387.74M.
Over the previous six quarters, LNKD has beaten the Wall Street consensus for EPS 6 times while beating the Wall Street Revenue consensus six times. Over the same time period LNKD has beaten the Estimize EPS consensus four times and the Estimize Revenue consensus three times.
The distribution of estimates published by analysts on Estimize range from $0.31 to $0.43 EPS and $378M to $400.20M revenues. We’re seeing a smaller distribution of estimates this quarter for LNKD than normal. The size of the distribution of estimates relative to previous quarters often signals whether or not the market is confident that it has priced in the expected earnings already. A narrower distribution signaling the potential for greater volatility post earnings, a wider vice versa.
The analyst with the highest estimate confidence rating this quarter is Daniel Miller who projects $0.36 EPS and $391.42M revenue. Estimate confidence ratings are calculated through algorithms developed by our deep quantitative research which looks at correlations between analyst track records and tendencies as they relate to future accuracy.
Expectations for LinkedIn aren’t high in the eyes of Wall Street. However, the biggest difference between the Estimize consensus and the Wall Street consensus is that analysts on Estimize see a higher potential of growth for LinkedIn in the future. The coming earnings report will pit the Estimize optimists against the Wall Street pessimists. However, with LinkedIn’s stock outperforming the market by almost 78%, it’ll be extremely interesting to see if LinkedIn can continue its amazing growth with innovation going into the future, unless this earnings report will be the one forecasting LinkedIn’s first tumble in its short career as a public company.
Get access to estimates published by buy side and independent analysts and register to create your own estimates by heading over to Estimize.
