LNKD

Facebook May Start a Job Board To Compete With LinkedIn

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Rumors continue to swirl that social media giant Facebook (FB) is in the process of creating a job board with its third party platforms to compete with LinkedIn (LNKD) and Monster Worldwide (). We understand why Facebook would want to compete with LinkedIn, especially after a Forbes article reported that LinkedIn earns $1.30 in revenue per hour of usage versus a measly $0.062 for Facebook. However, we’re unsure whether Facebook will be able to compete in the business networking space. Since its inception, Facebook has successfully captured a significant amount of its users’ free-time by providing a (mostly) unfiltered social experience. On Facebook, there’s a bit of a separation between one’s work life and one’s personal life. On the other … Read more

LinkedIn Posts Fourth-Quarter Results; Steer Clear of the Firm’s Shares

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LinkedIn (LNKD) reported fourth-quarter results that, to a large extent, are a non-event as it relates to the firm’s valuation. The company is reflecting substantial revenue and earnings growth long into the future, and while its current trajectory remains strong, it will only hold its lofty price if it can continue to deliver on such expectations quarter after quarter. We maintain the firm will not be able to deliver on the long-term expectations that are embedded in its stock price, but it may take some time for the market to realize our view. Revenue for its fourth-quarter roughly doubled from the same period a year ago, while net income came in at just under $7 million ($0.06 per share) during … Read more

LinkedIn Valuation: Completely Absurd, Significantly Overvalued

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A number of months ago, we wrote about Netflix (NFLX) and how we thought the shares were absurdly overvalued: Netflix Valuation: Completely Absurd, Significantly Overvalued. The stock was trading around $250 per share at that time, and now it’s trading for less than $100 per share. Today, we’re making a similar valuation call on LinkedIn (LNKD). LinkedIn posted third-quarter results Thursday after the close. When a company is growing as fast as LinkedIn, the year-over-year comparisons become relatively meaningless, and at the end of the day, we think earnings (and by extension cash flow) is what drives long-term equity prices. Our view is that the firm’s stock price will continue to hum along, until the Street grows impatient with the name (that … Read more

LinkedIn Posts Solid Second Quarter, Still Irrationally Overpriced

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LinkedIn (LNKD) posted solid second-quarter results Thursday, but we maintain that the price the market has put on this company makes very little sense. We’re increasing our fair value estimate to $55 per share from $45 per share primarily on the back of higher expected EBITDA for this year versus our original expectations. Revenue growth for its second quarter more than doubled, and the firm snuck in a $0.04 GAAP EPS profit in the period – not the magnitude we’d expect from a $100-plus per share stock, no matter how optimistic its growth prospects. To get such an inflated multiple, LinkedIn should have to earn it, and a quarter of outperformance is hardly enough. Member growth was over 60% in … Read more

Initiating Coverage of LinkedIn at $45 Fair Value

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This article originally appeared on Seeking Alpha. Please view disclosures: https://seekingalpha.com/article/271173-initiating-coverage-of-linkedin-at-45-fair-value Although LinkedIn (LNKD) appears to have carved out a nice niche in the professional-networking arena, the firm has quite a bit of work to do to effectively maximize its revenue platform, and competition from a plethora of potential rivals (including Facebook and Google) may inevitably cause long-term head winds. Still, the firm’s revenue trajectory will be stellar during the next few years, and translating this growth to the bottom line will largely hinge on its ability to leverage infrastructure and marketing costs. I am initiating coverage of LinkedIn with a $45 per share fair value estimate; revenue estimates at $496 million in 2011, $831 million in 2012, and $1.2 billion … Read more

5 Years Strong!

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Image Source: Andy Maguire By Brian Nelson, CFA This month was an important one for our investment research firm, Valuentum, and its flagship newsletter, the Best Ideas Newsletter. The June 2016 edition means that we have now surpassed the 5-year anniversary of the inception of this newsletter’s portfolio (page 8). This is a critical time horizon that we and many others believe is a good one to assess the quality of any money manager. Money managers can be lucky or unlucky over very short periods of time, as in the case of perhaps a 12-24 month period, but those that can generate and retain outperformance over a 5-year period and longer typically are doing a lot of things right, even … Read more

Nelson: The 16 Most Important Steps To Understand The Stock Market

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A previous version of this article appeared on our website July 21, 2013. Refreshed and updated throughout, as of July 2018. By Brian Nelson, CFA After earning my MBA at the University of Chicago Booth School of Business and training stock and credit analysts from large organizations over the past decade or so, I have heard just about every question (though I admit I am still surprised by many things and remain a very humble student of the markets). I’ve also spent years perfecting the discounted cash flow process for large research organizations such as Morningstar and studied under one of the most famed aggressive growth investors of all time, Richard Driehaus. My knowledge runs the gamut from value through … Read more