LinkedIn (LNKD) Provides Weak Guidance as Management Tries to Refocus Business; FBR Capital Cuts PT to $135
FBR Capital reiterated a Market Perform rating on LinkedIn (NYSE: LNKD), and cut the price target to $135.00 (from $189.00), following the company's 4Q earnings report. LNKD offered disappointing top- and bottom-line guidance for 2016. Top-line guidance was 7% below consensus at the midpoint of guidance, as adjusted EPS guided to 16% below consensus at the midpoint. Management is focusing investment and managerial attention on the most scalable opportunities. As a result, Lead Accelerator will be phased out.
Analyst William Bird commented, "LNKD's high multiple and post-close guidance miss should conspire to produce a sharply negative stock reaction. Issues weighing on the 2016 outlook include a refocusing of the business away from less scalable opportunities, deceleration in the online sales channel, macro weakness in EMEA and APAC, and a 2% F/X headwind. We also note some moderation in client retention and user engagement metrics. We have great respect for LNKD's competitive position and management; however, at 43x 2016E EBITDA (after SBC expense and applying the after-hours stock price of approximately $137), and declining visibility in LNKD’s growth trajectory, we believe the shares are fully valued. Our new price target is $135 (previously $189). We maintain our Market Perform rating."
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Shares of LinkedIn closed at $192.28 yesterday.