There are a couple of different ways to measure it, but whichever you choose, LinkedIn (NYSE:LNKD.DL) is still ridiculously expensive by traditional metrics. The company trades for about 630 times GAAP earnings per share, and 160 times non-GAAP earnings per share.
But after looking at these four charts, you might understand why investors are willing to pay so much for the stock.
Multiple revenue streams
When the company went public, many investors assumed that LinkedIn -- like its social media peer Facebook -- made most of its money from display advertising. But that's simply not true.
Talent Solutions, the largest and fastest-growing part of LinkedIn's business, offers companies that pay a fee help in filling job vacancies. Marketing Solutions is a fancy word for advertising via LinkedIn's site. And individuals who want enhanced features on their LinkedIn profiles pay for Premium Subscriptions.
Rapid revenue growth
Though revenue will surely slow eventually, the fact that Talent Solutions and Premium Subscriptions both grew by just under 70% during the most recent quarter shows that there should still be plenty of years with double-digit growth ahead.
A global presence with room for growth
Though the United States accounted for 62% of all revenue in the most recent quarter, the international side of the business is growing like gangbusters. With a far larger global HR market for LinkedIn to continue disrupting, there's no doubt that there's still a lot of room for growth.
This may be one of the most important nuggets from the company's most recent earnings release. The total number of members on LinkedIn grew by 37% from the same time last year. As the company noted in its release, this "represents the first membership growth acceleration since the third quarter of 2011."
What this really means for investors is that the network effect is really starting to take hold. As more job seekers realize that employers are migrating to LinkedIn, individuals are more likely to sign up for the service. Of course, this then leads even more businesses to use LinkedIn's Talent Solutions. It's a virtuous cycle.