Should Investors Buy LinkedIn Corp After a Sell-Off?

LinkedIn (NYSE: LNKD  ) shares are down 25% from an all-time high five months ago, aided by a 15% sell-off last week after the company reported fourth-quarter results. Has LinkedIn's recent sell-off created a buying opportunity?

LinkedIn's 47% year-over-year revenue growth wasn't enough to impress the Street last week when the world's largest online network of professionals reported earnings. Two metrics, in particular, suggested that the company's growth might be slowing: member growth and engagement. Members grew 7% sequentially in Q4 -- that's two percentage points less than the sequential member growth LinkedIn reported in the past two quarters. Further, LinkedIn's internal metrics pointed to decelerating engagement. Unique visiting members were up 31%, year over year. Member page views grew approximately 48% in the same period. Those growth rates are meaningfully lower than Q3's 49% and 72% year-over-year growth in unique visiting members and member page views, respectively.

Despite a clear deceleration in overall growth, LinkedIn's current level of growth is still incredibly robust. Did the market overreact to LinkedIn's Q4 report?

In the video below, Fool contributor Daniel Sparks discusses whether or not investors should buy LinkedIn after the sell-off.

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Comments from our Foolish Readers

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  • Report this Comment On February 17, 2014, at 2:21 PM, jab wrote:

    Motley Fool Million Dollar Portfolio Sixth Anniversary pick # 1 was Linkedln at $220.77. That pick was recent. Daniel Sparks with Motley Fool said he didn't buy then and he is not buying now at $160.00. What should we be thinking about Linkedln?

  • Report this Comment On February 17, 2014, at 2:27 PM, jab wrote:

    Previous comment should say at current levels approx. $186.00, not 160.00

  • Report this Comment On February 19, 2014, at 11:01 AM, TMFDanielSparks wrote:


    The Motley Fool is a diverse group. Note that I do not recommend investors sell.

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Daniel Sparks

Daniel is a senior technology specialist at The Motley Fool. To get the inside scoop on his coverage of technology companies, follow him on Twitter.

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