LinkedIn (LNKD) PT Raised to $189 at FBR Capital Posts Q3; Remains Sidelined on Valuation
FBR Capital analyst William Bird raised his price target on LinkedIn (NYSE: LNKD) to $189.00 (from $180.00) but maintained a Market Perform followings strong results after the close. Despite this the firm believes valuation is stretched 69x 2016E EBITDA.
Bird commented, "After a large guidance miss in 1Q15 and a lowered core revenue outlook in 2Q15, LNKD returned down the path of sizable beats in 3Q15, surpassing the midpoint of its revenue guidance by 4% (driven by core talent solutions) and exceeding its adjusted EBITDA guidance by 41% (i.e., the core business surprise was augmented by a richer mix of high-margin online products and lower Lynda.com and facilities expenses). Nascent initiatives, including Sales Navigator and Lynda.com, appear to be progressing well, while Sponsored Updates, LNKD’s key mobile ad play, appears to be further down the road and showing a continued solid revenue ramp. We have great respect for LNKD's competitive position and management, but at 69x 2016E EBITDA (after SBC expense and applying the after-hours stock price of ~$243), we believe the shares are fully valued. Our new price target is $189 (previously $180"
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Shares of LinkedIn closed at $217.00 yesterday.