Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.
NEW YORK (
) has been reiterated by TheStreet Ratings as a sell with a ratings score of D+. Among the areas we feel are negative, one of the most important has been premium valuation based on our review of its current price compared to such things as earnings and book value.
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Highlights from the ratings report include:
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Internet Software & Services industry and the overall market, LINKEDIN CORP's return on equity is below that of both the industry average and the S&P 500.
- This stock has increased by 95.16% over the past year, outperforming the rise in the S&P 500 Index during the same period. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
- The gross profit margin for LINKEDIN CORP is currently very high, coming in at 86.95%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, LNKD's net profit margin of 6.96% significantly trails the industry average.
- Net operating cash flow has significantly increased by 64.24% to $103.83 million when compared to the same quarter last year. In addition, LINKEDIN CORP has also vastly surpassed the industry average cash flow growth rate of 13.23%.
LinkedIn Corporation operates an online professional network. LinkedIn has a market cap of $18.2 billion and is part of the technology sector and internet industry. Shares are up 71.6% year to date as of the close of trading on Monday.
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--Written by a member of TheStreet Ratings Staff.