Back to top

Analyst Blog

LinkedIn Corp (LNKD - Analyst Report) is set to report fourth-quarter fiscal 2013 results on Feb 6. Last quarter, the company posted a negative earnings surprise of 100.0%. Let’s see how things are shaping up for this announcement.

Growth Factors this Past Quarter

LinkedIn delivered mixed third-quarter results. Although, the company’s top line surpassed the Zacks Consensus Estimate, the bottom line missed the consensus mark. Year-over-year revenues benefited the most from growth in its Talent Solution and Premium Subscription businesses.

Additionally, LinkedIn is gaining traction on the mobile and tablet platforms, which are expected to generate additional revenues. The company is expected to continue its investments in the near term, which might impact its profitability.

Moreover, we believe that LinkedIn’s rapid growth and new product rollouts could lead to poorer service levels. Also, there is a possibility that companies like Facebook Inc. (FB - Analyst Report), Microsoft (MSFT - Analyst Report) and Twitter will develop competing solutions and enter this adjacent market.

The emergence of companies likes ValueClick Inc., which have been introducing new services at regular intervals, could also bring about a rapid change in the scenario.

Earnings Whispers?    

Our proven model does not conclusively show that LinkedIn will beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as you will see below.

Zacks ESP:  Both the Most Accurate estimate and the Zacks Consensus Estimate stand at 9 cents. Hence, the difference is 0.00%.

Zacks Rank #4 (Sell): We caution against stocks with Zacks Ranks #4 and #5 (Sell rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Other Stocks to Consider

Here is another company which investors may want to consider as our model shows it has the right combination of elements to post an earnings beat this quarter:  

ON Semiconductor Corp. (ONNN - Analyst Report), Earnings ESP of +14.29% and a Zacks Rank #2 (Buy).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
RPC INC RES 24.91 +8.35%
LITHIA MOTO… LAD 94.59 +4.60%
DELTA AIR L… DAL 39.15 +3.90%
FLAMEL TECH… FLML 14.51 +3.50%
SOUTHWEST A… LUV 28.87 +2.92%