LinkedIn Rises 21% After Earnings, "Transformative" Year


LinkedIn (NASDAQ: LNKD ) soared today, rising more than 21 percent after the company announced its fourth quarter results . Revenue climbed 81 percent to $303.6 million versus $167.7 million during the year-ago period. Net income rose to $11.5 million versus $6.9 million for the fourth quarter of 2011. Non-GAAP net income was $40.2 million -- again, much higher than the $13.3 million posted one year ago.

Investors were very excited, to say the least. While many are hesitant to invest in Facebook (NASDAQ: FB ), LinkedIn immediately jumped upon the company's earnings release.

Up until now, LinkedIn was still performing well, rising more than 10 percent this year. The firm closed 2012 with gains of 79 percent.

Facebook has not been nearly as lucky. While the social media giant is up more than two percent year-to-date, it is still 25 percent lower than the price it debuted at last May.

"2012 was a transformative year for LinkedIn," Jeff Weiner, CEO of LinkedIn, said in a company release . "We exited 2011 having successfully revamped our underlying development infrastructure. Based on that investment, we said that 2012 would be a year of accelerated product innovation, and it was. The products we delivered throughout the year drove member engagement and financial results to record levels in the fourth quarter."

LinkedIn said that it expects to earn between $305 million and $310 million during the first quarter of 2013. Adjusted EBITDA is expected to be between $67 million and $69 million, while depreciation and amortization should fall within the range of $25 million to $27 million. Stock-based compensation is anticipated to be somewhere in the area of $32 million to $34 million.

The company's full-year 2013 guidance shows even greater levels of growth. LinkedIn currently estimates that it will earn between $1.41 billion and $1.44 billion this year.

Several analysts, including JPMorgan, Bank of America, Piper Jaffray and Wedbush, raised their Price Targets after hearing the news.

In the weeks prior to LinkedIn's earnings, JG Capital initiated coverage on the stock but expressed some concerns . "While we love LNKD's business, we are concerned with very high expectations coming into the results on Feb 7th," the firm wrote in its report on January 24.

Sterne Agee was a bit cautious as well, writing, "We are positive on the company's fundamentals but believe the current stock price already reflects this enthusiasm."

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This article appears in: Investing , Investing Ideas

Referenced Stocks: FB , LNKD


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