With shares of LinkedIn Corporation (NYSE:LNKD) trading around $118.80 per share, is LNKD an OUTPERFORM, a WAIT AND SEE, or a STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:
On January 9 LinkedIn celebrated the addition of 13 million users in just two months, hitting a total of 200 million users across 200 countries and territories. (Fun fact: 64 percent of LinkedIn members are located outside of the United States.)
This may seem underwhelming to anybody who knows that Facebook (NASDAQ:FB) has over 1 billion users, but this is still no small pie. According to comScore data, LinkedIn is the 23rd most-visited website in the world.
The fundamental difference between LinkedIn and Facebook is that the first is a professional network where the second is a casual network. The idea of a “Facebook Jobs” has been floated, but there are enough stories of people losing their jobs for online social behavior that it’s hard to believe that users will really want to bleed their personal and professional lives.
So what does this mean? This means that when people are using LinkedIn, they’re working. They may be networking, but social capital is still capital, and anybody with a head on their shoulders knows the tremendous value a robust network of professionals can provide.
Comparing the two social networks is like comparing apples to oranges. Yes, they’re both fruit, but after that it’d be hard to fool anybody into thinking one could be substituted for the other. This is important for advertisers who get a much more engaged (and, obviously, professional) demographic when choosing to market through LinkedIn.
Keep an eye out for the company’s fourth-quarter release on February 8. Analysts are expecting earnings of $0.19 per share, a 41 percent bump from the same period last year.