Canaccord Genuity analyst Michael Graham looks at LinkedIn’s solid Q4, determining that the company has set itself up well for a very strong 2014.

LinkedIn reported solid Q4 results

LinkedIn reported Q4 results well ahead of company guidance and slightly ahead of consensus. The revenue beat mostly came from the Marketing Solutions segment (we would have liked to see Talent Solutions stronger), which was up ~36% y/y and came in about 10% ahead of consensus. Talent solutions revenue missed our estimate but was essentially in line with consensus. Talent solutions decelerated to 53% y/y growth in Q4 compared with 62% in Q3.

Tempered guidance

Q1/14 and 2014 guidance is below consensus, but is likely conservative. For Q1 the company is guiding revenue to be in the range of $455-460 million (~41% y/y growth at midpoint) and EBITDA in the range $106-108 million. For 2014 the guidance is for $2.02-2.05 billion in revenue (~33% y/y growth at midpoint and slightly below our estimate of $2.15 billion) and for approximately $490 million in EBITDA (vs. our estimate of $558 million).

LinkedIn 4Q results

The company is holding a conference call today to discuss Q4 2013 results.

Valuation

Pending today’s conference call our price target remains unchanged at $270 and is based on 60x our 2017 EPS estimate of $6.81, discounted to present at 10.6%.