LinkedIn has been spending heavily on expansion by buying companies, hiring sales personnel and growing outside the United States, but is now facing pressure in Europe, the Middle East, Africa and Asia-Pacific due to macro-economic issues. “We were wrong," they said in a client note.Īs of Thursday, LinkedIn shares were trading at 50 times forward 12-month earnings versus Twitter Inc.’s 29.5 times, Facebook Inc.’s 33.8 and Alphabet Inc.’s 20.9, making it one of the most expensive stocks in the tech sector.įacebook, Alphabet and Inc are better picks for investors than LinkedIn, Evercore analysts wrote. RBC analysts said they had thought LinkedIn was on the cusp of “fundamentally positive" change.
Underscoring the slowdown in growth, LinkedIn said online ad revenue growth slowed to 20% in the fourth quarter from 56% a year earlier.
“This would imply that LinkedIn will grow around 15% in 2017 and 10% in 2018," the Mizuho analysts said. LinkedIn forecast full-year revenue of $3.60-$3.65 billion, missing the average analyst estimate of $3.91 billion, according to Thomson Reuters I/B/E/S. Raymond James, Cowen and Co, BMO Capital Markets, J.P.Morgan Securities and RBC Capital Markets also downgraded the stock.Īt least 22 brokerages cut their price targets on the stock, with RBC slashing its target by almost half to $156.
Mizuho downgraded the stock to “neutral" and slashed its target price to $150 from $258. “With a lower growth profile, we believe that LinkedIn should not enjoy the premium multiple it has grown accustomed to," Mizuho Securities USA Inc.
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