Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, online professional network operator LinkedIn (NYSE: LNKD ) has received the dreaded one-star ranking.
With that in mind, let's take a closer look at LinkedIn's business and see what CAPS investors are saying about the stock right now.
|Headquarters (founded)||Mountain View, Calif. (2002)|
|Market Cap||$12.6 billion|
|Industry||Internet information providers|
|Trailing-12-Month Revenue||$723.9 million|
|Management||Co-founder/Chairman Reid Hoffman CEO Jeffrey Weiner|
|Trailing-12-Month Return on Equity||2.2%|
|Cash/Debt||$617.1 million / $0|
Sources: S&P Capital IQ and Motley Fool CAPS.
On CAPS, 74% of the 1,186 members who have rated LinkedIn believe the stock will underperform the S&P 500 going forward.
The free competition is immense and the business model is unproven. As a user myself, I have never paid the company a dime and see no reason I will do so in the near future, which doesn't bode well for the profitability of the company. Given the excessive valuation and poor prospects for the kind of profitability necessary to maintain it in the long term relative to the S&P 500, I expect LinkedIn to underperform over the next five years.
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