LinkedIn Corpoation (LNKD) Earnings: Easier Comps Coming

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Shares of LinkedIn Corpoation (NYSE:LNKD) have more than recovered since their nosedive after the company’s last earnings report. As always, LinkedIn is expected to beat guidance because management typically guides conservatively. More specifically, analysts at Goldman Sachs are looking for a solid quarter as the social network’s Sales Navigator ramps up.

Expectations for LinkedIn Corpoation (NYSE:LNKD)

In a report dated July 28, 2014 analyst Heath P. Terry and his team said he’s looking for second quarter revenues of $515 million, which is a 42% year over year increase and compares to the 46% increase in the first quarter. Consensus estimates suggest revenue of $511 million. For EBITDA, they are expecting $128.3 million, compared to the consensus estimate of $122 million. They say both of these numbers are higher than LinkedIn Corpoation (NYSE:LNKD)’s guidance but that they’re not high enough to offer a “meaningful catalyst” for the company’s stock.

The Goldman Sachs team estimates $301 million in revenue from the company’s Talent Solutions segment, with 1.9k average new customers. In the near term, they think customer additions will become less relevant as LinkedIn consolidates a number of its big corporate contracts. They’re looking for $114 million in Marketing revenue even though the company’s user growth is slowing down. They say usage growth sped up, while newer native ad products drove monetization.

LinkedIn Corpoation (NYSE:LNKD) – Looking ahead to the second half

As always, they’re expecting LinkedIn management to provide conservative guidance for the third quarter. However, they say the potential for upside is increasing because the company’s comparisons are easing up. Other upside drivers include the ramp-up of Sales Navigator, international growth in Talent Solutions and mobile inventory monetization. The Goldman Sachs team says these factors should lessen the deceleration in growth, potentially pushing it lower than consensus estimates currently project.

The analysts believe LinkedIn Corpoation (NYSE:LNKD) will be one of the better Internet performers for the second half of the year. Their checks suggest that the sales effort ramp in Sales Navigator and also the positive reception from early customers will accelerate the social network’s revenue growth in Premium subscriptions. They believe easier comparisons will benefit the company’s deceleration in Talent Solutions growth, although they think this will happen slower due to the narrowing gap between international usage and revenue.

The Goldman Sachs reiterated their Buy rating and $230 per share price target on LinkedIn heading into this week’s report.

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