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What to Expect from LinkedIn (LNKD) this Earnings Season?
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Professional networking behemoth LinkedIn Corp. is set to report second-quarter fiscal 2016 results on Aug 4, 2016. In the last quarter, the company delivered a positive earnings surprise of 64.3%. Let’s see how things are shaping up for this announcement.
Factors to Consider
LinkedIn remains a leader in the emerging online professional networking segment with increasing worldwide popularity and steady growth in the recent past. LinkedIn reported encouraging results in the first quarter.
Though the company posted a loss during the quarter, the figure was much narrower than the Zacks Consensus Estimate as well as the year-ago quarter level. Moreover, LinkedIn’s first-quarter revenues surged 35% year over year and came ahead of management’s expectations as well as the Zacks Consensus Estimate.
We note that LinkedIn’s mobile segment has been gaining traction primarily on the back of the launch of its applications for Apple’s (AAPL - Free Report) iPhones and Android-based smartphones. Synergies from acquisitions — Lynda.com, Newsle and Bizo — are expected to boost earnings through targeted marketing strategies besides enhancing user experience.
We believe that LinkedIn’s initiatives to bolster advertising revenues through product launches and partnership programs have been commendable. We also expect advertisers to take note of the company’s growing user base.
LinkedIn’s investments in strategic products are imperative, in our view, as other companies like Facebook and Twitter are equally keen on expanding in the professional networking space.
On the flip side, continued investments to provide new and improved products and services might hurt LinkedIn’s profits in the short run.
Our proven model does not conclusively show that LinkedIn is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here, as you will see below.
Zacks ESP: Earnings ESP for LinkedIn is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at a loss of 6 cents per share.
Zacks Rank: LinkedIn carries a Zacks Rank #3 which when combined with an ESP of 0.00% makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Qualys, Inc. (QLYS - Free Report) , with an Earnings ESP of +12.50% and a Zacks Rank #3
CenturyLink, Inc. with an Earnings ESP of +1.70% and a Zacks Rank #3
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
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What to Expect from LinkedIn (LNKD) this Earnings Season?
Professional networking behemoth LinkedIn Corp. is set to report second-quarter fiscal 2016 results on Aug 4, 2016. In the last quarter, the company delivered a positive earnings surprise of 64.3%. Let’s see how things are shaping up for this announcement.
Factors to Consider
LinkedIn remains a leader in the emerging online professional networking segment with increasing worldwide popularity and steady growth in the recent past. LinkedIn reported encouraging results in the first quarter.
Though the company posted a loss during the quarter, the figure was much narrower than the Zacks Consensus Estimate as well as the year-ago quarter level. Moreover, LinkedIn’s first-quarter revenues surged 35% year over year and came ahead of management’s expectations as well as the Zacks Consensus Estimate.
We note that LinkedIn’s mobile segment has been gaining traction primarily on the back of the launch of its applications for Apple’s (AAPL - Free Report) iPhones and Android-based smartphones. Synergies from acquisitions — Lynda.com, Newsle and Bizo — are expected to boost earnings through targeted marketing strategies besides enhancing user experience.
We believe that LinkedIn’s initiatives to bolster advertising revenues through product launches and partnership programs have been commendable. We also expect advertisers to take note of the company’s growing user base.
LinkedIn’s investments in strategic products are imperative, in our view, as other companies like Facebook and Twitter are equally keen on expanding in the professional networking space.
On the flip side, continued investments to provide new and improved products and services might hurt LinkedIn’s profits in the short run.
LINKEDIN CORP-A Price and EPS Surprise
LINKEDIN CORP-A Price and EPS Surprise | LINKEDIN CORP-A Quote
Earnings Whispers?
Our proven model does not conclusively show that LinkedIn is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here, as you will see below.
Zacks ESP: Earnings ESP for LinkedIn is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at a loss of 6 cents per share.
Zacks Rank: LinkedIn carries a Zacks Rank #3 which when combined with an ESP of 0.00% makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Qualys, Inc. (QLYS - Free Report) , with an Earnings ESP of +12.50% and a Zacks Rank #3
CenturyLink, Inc. with an Earnings ESP of +1.70% and a Zacks Rank #3
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>