The last few months have been tough for LinkedIn (NYSE:LNKD.DL) investors with the stock down nearly 20% from its all-time highs. Investors quickly soured on the social-media job networker after fourth-quarter guidance wasn't as high as consensus estimates.
Facebook (NASDAQ:FB) suffered the same fate as an initial positive earnings report was quickly overshadowed by negative comments on the conference call. These two events pointed to a repricing in the social-media landscape.
However, that narrative was quickly changed with Twitter's (NYSE:TWTR) successful IPO. Twitter quickly jumped from $26 per share to $45, and is priced at an astonishing price-to-sales ratio of 55.
As far as valuation is concerned, LinkedIn is priced at the lowest price-to-sales ratio and also has the lowest value per active user. Also, with three revenue-driving divisions, LinkedIn is more than just an advertising model.
Watch Jamal Carnette discuss if LinkedIn is a great long-term investment with Evan Niu, CFA.