LinkedIn's Earnings: What Investors Need to Know

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

Social-media job recruiter, LinkedIn (NYSE: LNKD  ) is reporting results later today. While the Street is still sifting through Apple's earnings report and eagerly awaiting results from LinkedIn's social-media brethren, Facebook  (NASDAQ: FB  ) , could investors be overlooking an opportunity with LinkedIn? What should LinkedIn investors know, and what can LinkedIn learn from Facebook?

Amazing revenue growth must continue
S&P's Capital IQ consensus estimates project LinkedIn to report revenue of $385.5 million, an amazing 53% higher than last year's quarter. Revenue growth is extremely important and will be watched closely; investors have been extremely bullish on LinkedIn's prospects and have bid the company up from a price-to-sales ratio of 12 to its current ratio of nearly 23. If LinkedIn doesn't hit this ambitious goal, it's possible we could see a large selloff.

Guidance is important too
In addition to reporting phenomenal revenue for this quarter, LinkedIn must provide positive guidance for next quarter and the upcoming year. While the current consensus revenue estimate is receiving the most attention, lost is the fact that analysts are expecting LinkedIn to increase this quarter's revenue by over 40% in the September 2014 quarter by reporting $544.8 million.

Here's why they will do both
In a nutshell, the answer is mobile: LinkedIn has an aggressive plan to build out its mobile network, even hosting its first Mobile Day on Oct. 23. CEO Jeff Weiner hailed mobile as a "game-changer" for LinkedIn's products and revenue.

Looking at the numbers one can understand why: Mobile users are 2.5 times as active as desktop-only users. And while LinkedIn is more than just a social-media advertising model (54% of its revenue is talent solutions—job postings—and another 20% is premium subscriptions), all three of its business divisions will benefit from a more engaged user base.

LinkedIn is aggressively attacking this new opportunity. In addition to the company redesigning its iPad app, it also announced Intro to attache profile information about an email's sender. While there were grumblings about privacy and security, you can see how LinkedIn is aggressively targeting the mobile experience.

Why the sudden change of heart?
Many initially thought that LinkedIn should have continued to build its website around the desktop experience and wonder why LinkedIn decided to pivot to mobile. The answer? To paraphrase famous bank robber Willie Sutton, "because that's where the monetization is."

Facebook shocked investors by growing mobile revenue from nearly nothing to 41% of its total ad revenue in the company's second quarter. Mark Zuckerberg even stated in his call that he expected to have more revenue on mobile than on desktop. Facebook reports tomorrow, and many investors expect the monetization in mobile to continue.

Final Foolish thoughts
LinkedIn is a clear leader in this space and has become a must have for any career-oriented professional. Wall Street has high hopes for revenue growth, guidance, and monetization of mobile. LinkedIn has ambitious targets but appears to have a plan to meet those goals.

Social media investors need to watch this video
LinkedIn is a fantastic story, so much so that we can't cover it all in a single article. Find out what I can't say in this special video. LinkedIn is growing twice as fast as Google and Facebook, and more than three times as fast as and Apple. Watch our jaw-dropping investor alert video today to find out why The Motley Fool's chief technology officer is putting $117,238 of his own money on the table, and why he's so confident this will be a huge winner in 2013 and beyond. Just click here to watch!

Read/Post Comments (1) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 29, 2013, at 4:12 PM, JohnS wrote:

    LinkedIn provides a cheaper alternative and a wider reach for companies looking to hire and individuals looking to boost their professional profile, as compared to advertising agencies. They also provide more specified products to boost the overall hiring experience as compared to Facebook. LinkedIn is set for a great future.

Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2704147, ~/Articles/ArticleHandler.aspx, 9/29/2016 9:38:14 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 11 hours ago Sponsored by:
DOW 18,339.24 110.94 0.00%
S&P 500 2,171.37 11.44 0.00%
NASD 5,318.55 0.00 0.00%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/28/2016 4:00 PM
AAPL $113.95 Up +0.86 +0.00%
Apple CAPS Rating: ****
AMZN $828.72 Up +12.61 +0.00% CAPS Rating: ****
FB $129.23 Up +0.54 +0.00%
Facebook CAPS Rating: ***
GOOGL $810.06 Down -0.67 +0.00%
Alphabet (A shares… CAPS Rating: *****
LNKD $192.29 Up +0.09 +0.00%
LinkedIn CAPS Rating: ***