LinkedIn (LNKD) PT Cut to $250 at Evercore ISI; Disappointment Mostly Impacted by 'One-Timers'
Evercore ISI analyst Ken Sena lowered his price target on LinkedIn (NYSE: LNKD) to $250.00 (from $290.00) following in-line Q1 and lower guidance. The analyst reiterated his Buy rating saying the effects of Lynda, FX and other one-times caused the disappointment.
Sena commented, "LinkedIn missed 2Q expectations and took its FY guidance down despite an additional $20-$25mm in revenues from its recently announced Lynda acquisition ($1.5bn paid). While a surprise and a disappointment certainly, we do view the miss as stemming mostly from one-time items, a conclusion we arrive at through a serious of bridges. Consequently we still view LinkedIn as among the more attractive and differentiated names in our coverage. Moreover, as shares will likely open at a trough level valuation on the basis of EV/rev, and much of the disappointing guide was based on one-time items as mentioned, particularly on the EBITDA line, we see the sell-off as being overdone."
The firm cuts 2Q revenue by 7% to $682mm (28% y/y), slightly above the high-end of the guide and driven mostly by lowering Marketing Solutions and Premium Subscriptions, while EBITDA falls by $73mm to $122mm (18% of revs). For the FY, revenue falls 3% to $2.91bn (31% y/y) and EBITDA falls by nearly $200mm to $633mm (22% of revs). 2016 sees a similar 3% revenue adjustment to $3.8bn, but EBITDA falls a more modest $160mm to $1.2bn (30% of rev).
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Shares of LinkedIn closed at $252.13 yesterday.