LinkedIn (LNKD) Price Target Raised to $270 at Evercore ISI

Evercore ISI analyst Ken Sena reiterated a Buy rating and boosted his price target on LinkedIn (NYSE: LNKD) to $270.00 (from $235.00) following a visit to LinkedIn HQ and an examination of recent traffic trends.

Sena highlighted:

• User growth remains strong, growing ~51% y/y QTD, an acceleration over the prior quarter’s 47% y/y and the low-to-mid-twenties growth witnessed earlier this year. Meanwhile, engagement also seems to be healthy with desktop minutes/unique visitor up 40% y/y. While mobile engagement is showing some low-teens decline, this appears to be the result of higher-than-average user growth (an accelerated denominator) in addition to a reduction in company-specific notifications (i.e., birthdays, profile updates/viewings, etc.).
• Content efforts showing traction as long-form publishing capabilities now reach ~2/3rds of members (after launching just 6 mo. ago), with 40K posts being made per week. This has contributed to homepage engagement being 25-30% of total vs. ~10% two yrs ago.
• Marketing solutions showing momentum as LNKD indicated Sponsored Updates to be their best performing ad format to date with click-throughs at industry-leading levels. Separately, Bizo, its recently acquired ad analytics and third-party B2B delivery platform, seems geared to make performance a bigger component of the company's go-to-market strategy, expanding its addressable ad base.
• Trends in Talent & Premium also seem good. The company was upbeat on its improving capabilities to algorithmically identify job opportunities (leveraging its Bright Media acquisition) and recent efforts to index available jobs (similar to Indeed.com), both arguing for further pricing leverage within Talent, consistent with its plans for a price increase. Meanwhile, attractive ROI levels were cited on both Talent and Premium, with a much wider range of ROI outcomes on Premium noted, reflecting the nascence of Sales Navigator.

The firm's 4Q14 revenue/EBITDA increases 2%/4% respectively, as they now expect rev of $618m (38% y/y) and Adj. EBITDA of $162m (26% of revs). For 2015, rev and Adj. EBITDA increase 3%/7% to $2.97b (35% y/y) and $818m (27.5% of revs), respectively.

For an analyst ratings summary and ratings history on LinkedIn click here. For more ratings news on LinkedIn click here.

Shares of LinkedIn closed at $233.00 yesterday.

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