Buy! 11 analysts chime in on LinkedIn's Q2 earnings

LinkedIn Jeff WeinerGetty Images/Mandel NganLinkedIn CEO Jeff Weiner.

LinkedIn stock has been bouncing around in after-hours trading when, after an initial spike of 14%, it dropped down to almost -5%.

The turbulence came after the professional social networking company reported its Q2 earnings. It beat expectations, with revenue at $US712 million versus analyst expectations of $US679.80 million, and an non-GAAP EPS of $US0.55 versus an estimated $US0.33.

But the stock still dipped because, as the Wall Street Journal notes, investors realised some of LinkedIn’s unexpected strength came from the acquisition of skills video library

The price is currently sitting at $US227.39.

So what lies ahead for LinkedIn? Business Insider has reviewed research notes from 11 analysts covering the company — and they’re overwhelmingly positive. Just one recommended sell, with the majority maintaining an overweight rating on the stock.

Take a read:

Credit Suisse: BULLISH

Rating: Outperform

Price target: $US311 (revised from $US307)

Comment: 'Strength in Talent Solutions and greater-than-expected contribution from Lynda (closed in 2Q15) were overshadowed by mgmt commentary around continued declines in legacy display - as this is now 3% of revenue and de-indexed as a contributor, it presents little incremental downside risk to estimates. We hence look past this transitory headwind to highlight: 1) strong corporate customer additions/ARPU growth, 2) growing contribution from Sponsored Updates/Bizo, 3) continued ramp of Sales Navigator, 4) accelerating user engagement, and 5) ongoing ramp of LNKDs presence in China (>10m members) as signs that our LT positive investment thesis remains intact and as such we maintain our Outperform rating.'

Jeffries: BULLISH

Rating: Buy

Price target: $US300 (revised up from $US290)

Comment: 'LinkedIn reported results ahead of guidance in part due to the early closure of Lynda, but also because of strength in Talent Solutions. The company is still early in large market opportunities, including Sales Navigator, Lead Accelerator, Bizo and Lynda.'

Morgan Stanley: BULLISH

Rating: Overweight

Price target: $US280

Comment: 'We remain bullish as 2Q showcased the Talent Solutions runway, momentum in Sponsored Content, and LNKD's ability to deliver higher earnings power. Programmatic is negatively impacting the legacy ad business, but LNKD's higher-quality assets (inc keep driving platform monetisation higher.'

Wells Fargo Securities: BULLISH

Rating: Outperform

Price target: $US270-$US280

Comment: 'We favour LNKD's position as the leading, global professional social network, where the company's 'clean signal' identity data powers connectivity to the benefit of members, corporate recruiters, and b-to-b marketers. We believe an expanding portfolio of products and international growth opportunities provides a ramp to multiple years of double-digit revenue growth and margin and earnings expansion.'


Rating: Outperform

Price target: $US260

Comment: 'We view LinkedIn positively across several key areas, the platform (scale, network effect), management focus, multiple large addressable markets and early stages of monetisation. Our survey work has consistently demonstrated LNKD to be a destination for incremental spend by talent management professionals on HR services. And more recently, we see a powerful incremental topline growth opportunity from Sales Navigator. We also view LNKD favourably due to their excellent management team, which has executed well in the public markets and appears to be building a strong franchise for the long term.'

Cantor Fitzgerald: BULLISH

Rating: Buy

Price target: $US260 (revised up from$245)

Comment: 'We're reiterating our BUY rating and increasing our estimates and PT to $US260 from $US245, reflecting stronger-than-expected 2Q results, and revised outlook. While some of the top and bottom line outperformance was helped by the earlier closing of the acquisition, core LinkedIn performed well nonetheless, except for Marketing Solutions, which suffers from weak Display.'

Barclays: BULLISH

Rating: Overweight

Price target: $US250

Comment: 'We believe LinkedIn has significant runway to grow its recruiting solutions and advertising businesses and longer-term potential to drive significant margin expansion. That said, we believes shares are close to fair value at current levels which leaves us on the sidelines.'

Pacific Crest: BULLISH

Rating: Overweight

Price target: $US250

Comment: 'LinkedIn reported one of the best Q2s of any Internet company. We think investors should take advantage of the Street's typical negative reaction to LinkedIn's typical conservative guidance and continue to add to positions.'

PiperJaffray: BULLISH

Rating: Overweight

Price target: $US240 (revised down from $US246)

Comment: 'LinkedIn posted a solid Q2 following last quarter's sales realignment with revenue 4% ahead of the mid-point of guidance (ex-Lynda) and 2% ahead of the Street. The company noted improved performance for Talent Solutions in net ratio and churn, which they believe were a result of the realignment. While shares of LNKD were up briefly after the report in the aftermarket, they retreated, we believe, as a result of investors backing out the outperformance of Lynda and the mixed guide for the core in 2H15 with some weakness in Marketing Services vs strength in Talent Solutions. We believe the positive commentary on Talent Solutions should outweigh the changes in Marketing Services over time, but believe investors are hyper sensitive to top-line revenue given two quarters of slightly lower upside than usual.'

Baird Equity Research: NEUTRAL

Rating: Neutral

Price target: $US220

Comment: 'Maintaining Neutral rating on valuation following controversial Q2 results and outlook that led to volatile after-hours session. Q2 results exceeded consensus, though after adjusting for, guidance was slightly below prior consensus. Quar ter and outlook included several notewor thy positives, as well as some negatives which will likely lead to further volatility. Remain constructive on long term-fundamentals, though sensitive on price. We would be buyers on a pull-back -- EV/NTM revenue of 6.5x has been a historic support point.'

Brean Capital: BEARISH

Rating: Sell

Price target: $US172

Comment: 'Key points underlying our Sell thesis: 1) our concerns around the core 'browsability' of LinkedIn, which we feel falls short of peers due to the nature of the website; 2) member engagement metrics are industry-lagging and we would like to see new initiatives drive improved user metrics before anticipating significant advertising revenue upside from here; 3) we are less optimistic than investors on the potential success of Sales Navigator; 4) we suspect that Talent Solutions may be facing imminent price cuts and tiered pricing strategies, due to our assessment of high levels of penetration at the mid to large corporate client base in developed economies, and subsequent need to push downstream to more price sensitive SMBs; and 5) we believe Marketing Solutions includes high CPM's which are subject to limited visibility and poor targeting.'

NOW WATCH: Tech Insider videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at