LNKD  Linkedin Corporation

Exchange

NYSE

Sector

Technology

Industry

Internet Information Providers

Market Cap.

26.56B

Vuru Grade

44.33/100

Current Price

$195.96
+0.00 (+0.00%)

Growth Price

$47.20
Overvalued by 75.91%

Stability Price

$20.04
Overvalued by 89.77%

Company Metrics

  • P/E 722.96
  • P/S 7.35
  • P/B 5.45
  • EPS -1.25
  • Cash ROIC 34.60%
  • Cash Ratio 2.63
  • Dividend 0 / 0%
  • Avg. Vol. 803,681.00
  • Shares 135.54M
  • Market Cap. 26.56B

Company Description

LinkedIn Corporation (LinkedIn) is a professional network on the Internet with more than 90 million members in over 200 countries and territories. Through the Company’s platform, members are able to create, manage and share their professional identity online, build and engage with their professional network, access shared knowledge and insights, and find business opportunities. Its members creat... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

Is LinkedIn Corp a Buy?
Motley Fool - May 5, 2016
Shares of LinkedIn (NYSE:LNKD) just can't get any turnaround momentum going. After Q1 results sparked a big after-hours pop last Thursday, the shares have since retreated and remain off more than 50% from their 52-week highs.
Better Buy: LinkedIn Corp. vs. Facebook Inc.
Motley Fool - Sep 22, 2016
It may seem like a distant memory now, but it was just February of this year that LinkedIn (NYSE:LNKD) lost nearly half its value following a "disappointing" 2016 Q1 outlook.
LinkedIn Corp. Earnings: Is This Catalyst Still Kickin'?
Motley Fool - Apr 23, 2016
When LinkedIn (NYSE:LNKD) reported fourth-quarter results, the world's largest online network of professionals gave investors a reason to view the company's growth prospects skeptically.
LinkedIn Corp: What Can Pull LNKD Out of Its Funk? - Investorplace.com
LinkedIn Stock: Here's Why the Bears Are Wrong on LinkedIn Corp - Profit Confidential
3 Ways LinkedIn Corp Plans to Grow Its Largest Business
Motley Fool - Jun 9, 2016
LinkedIn (NYSE:LNKD) is a growth stock. Last quarter, the online network generated $861 million of revenue -- up 35% from the same quarter last year.
Microsoft's Massive LinkedIn Corp Acquisition in 6 Metrics
Motley Fool - Jun 15, 2016
Microsoft (NASDAQ:MSFT) and LinkedIn (NYSE:LNKD) both surprised investors Monday when they announced the software giant had agreed to purchase the social network for professionals in what is Microsoft's largest acquisition in history.
LinkedIn Corp Downgraded For Microsoft Corporation Acquisition - ValueWalk
Salesforce Said to Have Been Rival Suitor for LinkedIn - Bloomberg
LinkedIn Corp Gets a Pink Slip as Shares Plummet 41% in February
Motley Fool - Mar 10, 2016
LinkedIn reported fourth quarter results in the first week of February. The business-class social network beat its own revenue and earnings guidance, not to mention Wall Street consensus estimates.
Why LinkedIn Corp. Has Fallen 15% in 2016
Motley Fool - Jun 24, 2016
That report left LinkedIn looking like a former growth stock, and investors were quick to remove premium-level valuation multiples from the shares.
For LinkedIn China, Microsoft Deal Is a Complicated Connection - Wall Street Journal
7 Key Numbers From LinkedIn Corp's First Quarter Earnings Report
Motley Fool - Jun 12, 2016
LinkedIn (NYSE:LNKD) shares have risen about 7% since late April, when the online network turned in a better-than-expected first quarter earnings report.
Microsoft Pays $26 Billion for LinkedIn in Biggest Deal Yet - Bloomberg
LinkedIn soars on deal to sell to Microsoft for $26.2 billion - MarketWatch
LinkedIn Corp Stock Rises: Are Investors Taking Advantage of a Sell-Off?
Motley Fool - Jun 1, 2016
LinkedIn (NYSE:LNKD) stock saw a notable jump on Tuesday, rising 4%. There was no particular reason for the move. However, it adds to the stock's ongoing rise since its huge 44% one-day decline in February, when LinkedIn reported worse-than-expected ...
LinkedIn Corp (LNKD) Stock: Nice Pop, But It's Still Broken - Investorplace.com
Microsoft's LinkedIn Corp Acquisition: An In-Depth Look
Motley Fool - Jun 23, 2016
LinkedIn and Microsoft announced a big deal. In fact, it was Microsoft's biggest acquisition in history ever, paying $26.2 billion for the company.
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for LNKD to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate LNKD's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$195.96 Current Price

$47.20 Growth Price (DCF)

Overvalued by 75.91%


Growth Rate Assumed by Market: 58.53%


Future Free Cash Flow Growth Rate: 0.0%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$20.04 Stability Price (EPV)

Overvalued by 89.77%


Discount Rate: 15.0%

$10.27 NCA Price

Overvalued by 94.76%

$1,191.21 Book Price

Undervalued by 507.89%


Excellent Cash Return on Invested Capital over the past 5 years

LNKD has efficiently invested its financial resources in buildings, projects, and equipment, resulting in strong returns. Annual Reports can be useful in identifying the cause of one-time events and future sustainability.

LNKD has created $34.60 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20112012201320142015
Free Cash Flow 37.04M 141.65M 158.45M 21.32M 299.73M
divided by
Invested Capital 69.53M 217.40M 381.50M 1.10B 2.70B
Cash ROIC 53.27% 65.16% 41.53% 1.94% 11.09%

Poor Return on Equity over the past 5 years

LNKD has shown an inability to deliver strong results for shareholders. This could be due to poor management, LNKD operating in a highly competitive industry, or having a weak business in general.

LNKD has only generated $0.23 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20112012201320142015
Net Income 11.91M 21.61M 26.77M -15.32M -164.76M
divided by
Stockholders' Equity 624.98M 908.42M 2.63B 3.33B 4.47B
Return on Equity 1.91% 2.38% 1.02% -0.46% -3.69%

Mediocre Business Performance over the past 9 years

LNKD isn't a strong business and might be consistently attempting to fuel growth with debt or has trouble staying profitable. The lack of predictability in free cash flow should be concerning for the reliability of future earnings.

LNKD has been unable to consistently create value for shareholders.
Figures in USD. Fiscal year ends in December
200720082009201020112012201320142015
Free Cash Flow -317,000.00 -10.43M 8.08M -140,000.00 37.04M 141.65M 158.45M 21.32M 299.73M

Very Strong Balance Sheet

LNKD has more Cash than its Total Liabilities, resulting in $4.26 Net Cash per share. In other words, if you buy LNKD today, the price you're paying for shares is actually $191.70 because $4.26 of Cash is included in the current share price. This much Cash is very healthy. It can help LNKD sustain itself in the face of any economic turmoil and makes a stock buyback more of a possibility.
Figures in USD. Fiscal year ends in December
200720082009201020112012201320142015
Cash 17.95M 80.50M 89.98M 92.95M 577.50M 749.55M 2.33B 3.44B 3.12B
Current Assets - - 121.16M 172.21M 725.93M 1.02B 2.76B 4.12B 3.94B
Total Assets 35.16M 122.06M 148.56M 238.19M 873.70M 1.38B 3.35B 5.43B 7.01B
Current Liabilities - - 49.27M 105.47M 226.66M 415.38M 641.99M 882.79M 1.19B
Total Liabilities 28.57M 116.83M 139.48M 201.94M 248.72M 473.91M 723.40M 2.10B 2.54B
Stockholder' Equity 6.59M 5.23M 9.08M 36.25M 624.98M 908.42M 2.63B 3.33B 4.47B
Current Ratio - - 2.46 1.63 3.20 2.45 4.29 4.67 3.31
TL-to-TA 0.81 0.96 0.94 0.85 0.28 0.34 0.22 0.39 0.36

Consistent Reinvestment of Profits over the past 9 years

LNKD has consistently retained profits. This may put LNKD in a strong position to invest for the future, by buying new machinery, investing in R&D or a number of other options. By effectively using these earnings, LNKD can greatly improve their long-term economic picture.
Figures in USD. Fiscal year ends in December
200720082009201020112012201320142015
Retained Earnings - - -20.06M -4.67M 7.24M 28.85M 55.62M 39.87M -129.07M
Retained Earnings Growth - - - 76.71% 254.97% 298.48% 92.79% -28.31% -423.72%

Loss Making Entity over the past 9 years

LNKD has been unable to maintain profitability. It's Costs of Sales have outstripped Revenue consistently. This is a huge red flag, unless the company has been investing heavily for the future. However, even that is dubious since accurately predicting the future of a company like that is extremely difficult.

$0.18 of every $100 of Revenue have been a loss, on average over the past 9 years.
Figures in USD. Fiscal year ends in December
200720082009201020112012201320142015
Net Income 328,000.00 -4.52M -3.97M 15.39M 11.91M 21.61M 26.77M -15.32M -164.76M
divided by
Revenue 32.49M 78.77M 120.13M 243.10M 522.19M 972.31M 1.53B 2.22B 2.99B
Net Profit Margin 1.01% -5.74% -3.31% 6.33% 2.28% 2.22% 1.75% -0.69% -5.51%

Strong Pricing Power over the past 9 years

LNKD has maintained substantial gross margins, suggesting that they have been able to set prices without consideration of the cost of goods sold. This potentially leaves flexibility in inflationary environments to raise prices on consumers and maintain profitability.

$82.74 of every $100 worth of sales have been Gross Profit, on average over the past 9 years.
Figures in USD. Fiscal year ends in December
200720082009201020112012201320142015
Gross Profit 25.10M 60.18M 94.27M 198.27M 440.74M 846.79M 1.33B 1.92B 2.57B
divided by
Revenue 32.49M 78.77M 120.13M 243.10M 522.19M 972.31M 1.53B 2.22B 2.99B
Gross Margin 77.27% 76.40% 78.48% 81.56% 84.40% 87.09% 86.73% 86.76% 86.00%

High Capital Intensity over the past 9 years

LNKD spends large amounts of capital buying new equipment or investing in new facilities to stay competitive. Over the long term, those costs may have to be fuelled by debt. Look at the growth of Shareholders' Equity to see if this strategy is having a positive or negative impact.

1,041.70% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in December
200720082009201020112012201320142015
Capital Expenditure 7.96M 19.58M 13.28M 54.49M 96.38M 125.42M 278.02M 547.63M 507.25M
divided by
Net Income 328,000.00 -4.52M -3.97M 15.39M 11.91M 21.61M 26.77M -15.32M -164.76M
Capital Expenditure Ratio 2,426.22% -432.97% -334.23% 354.20% 809.12% 580.38% 1,038.59% -3,574.63% -307.87%

No Dividend History over the past 9 years

LNKD has never distributed dividends or has recently suspended their dividend distribution.
Figures in USD. Fiscal year ends in December
200720082009201020112012201320142015
Dividend Paid - - - - - - - - -
divided by
Shares Outstanding - - - 92.10M 104.12M 112.84M 118.94M 122.80M 129.02M
Dividend Paid Per Share - - - - - - - - -
Price at Year End - - - - 63.01 112.89 214.65 232.67 227.53
Dividend Yield - - - - - - - - -

No History of Stock Buybacks over the past 9 years

We're neutral on this. It's not necessarily good or bad that LNKD hasn't initiated a stock buyback.
Figures in USD. Fiscal year ends in December
200720082009201020112012201320142015
Shares Outstanding - - - 92.10M 104.12M 112.84M 118.94M 122.80M 129.02M
Stock Bought Back - - - -100.00% -11.54% -7.73% -5.13% -3.14% -4.82%
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Discussion
Sort By:
1
Posted by AJSmithtwin  (on November 20, 2013)
Premium services purchased do not justify the extra price. I speak from personal experience as a customer that is frustrated with the poor platform LNKD is using to allow people to connect and network.
1
Posted by rishi.bhargava  (on October 14, 2012)
Really such a low growth price?
2
Posted by pbanik  (on October 15, 2012)
http://www.google.ca/finance?q=lnkd&ei=gq97ULD7JcruqwH_ywE shows this stock to be trading at over 900 times earnings.

It earned less in the second quarter of 2012 compared to the same time period in 2011, despite the revenue nearly doubling.
http://www.google.ca/finance?q=NYSE%3ALNKD&fstype=ii&ei=ia97UJi5FIb_qAGE4gE