LinkedIn (LNKD.DL) 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.