LinkedIn Corp (NYSE:LNKD), the leading professional social networking, is scheduled to report its financial results for the second quarter of the current fiscal year on Thursday, August 1 after the market close.
Hours prior to reporting its earnings results, the stock price of LinkedIn Corp (NYSE:LNKD) gained by nearly 4% to around $210.93 per share at around 12:21 in the afternoon in New York.
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Morgan Stanley analysts Scott Devitt and John Egbert noted that LinkedIn Corp (NYSE:LNKD) stock declined by almost 20% intra-quarter due to concerns over declining revenue growth in its marketing solutions. The stock managed to regain its value as investors seemed to become more comfortable with the company’s marketing transition.
LinkedIn losing money by catering to big customers instead of providing service
Devitt and Egbert projected that LinkedIn Corp (NYSE:LNKD) revenue will increased by 55% year-over-year to $353 million. Their estimate is approximately 2% higher than the midpoint guidance at $342 million to $347 million revenue.
According to the analysts, the company is expected to decline by around 40% year-over-year because of its transition from large customized deals to more scalable marketing products.
Devitt and Egbert estimated that LinkedIn Corp (NYSE:LNKD) will be able to generate $83 million adjusted EBITDA at approximately 24% margin, which is higher than the consensus estimate of Wall Street analysts. It is also above the high-end guidance of the company at $77 million to $79 million adjusted EBITDA.
LinkedIn Corp (NYSE:LNKD) is expected by the Devitt and Egbert to generate $0.32 earnings per share (Non-GAAP) compared with $0.30 EPS consensus expectation of Wall Street analysts for the second quarter.
According to the analysts, the continued momentum of talents solutions of the company could drive an upside to their $200 million estimate. Devitt and Egbert noted that the page views of LinkedIn Corp (NYSE:LNKD) at 600 million exceeded their projection. According them, the outperformance could yield an upside to their $85 million estimate for the marketing solutions.
For the third quarter, the analysts projected that LinkedIn Corp (NYSE:LNKD) will be able to achieve a revenue of $370 million to 375 million below to or $375 million to $380 million in line with their $379 million revenue estimate. Its 3Q adjusted EBITDA is projected to be around $91 million at 24% margin and non-GAAP EPS of $0.35.