Why LinkedIn (LNKD) Is Up Today

NEW YORK (TheStreet) -- LinkedIn (LNKD) was gaining 2.7% to $197.16 Wednesday after the company announced it will open its publishing platform to all of its users.

LinkedIn director of product management Ryan Roslansky announced the new feature on the company's official blog. The goal is to let all professionals share their experience with everyone else on the social network. "Every professional has valuable experience to share," Roslansky said.

The feature is currently available to 25,000 LinkedIn members, and will eventually roll out to all 277 million users. The feature offers the ability for users to follow other LinkedIn members who aren't in their network, and to build their own collection of followers, according to Roslansky.

While the company is giving all users the ability to publish more content, it is also adding more professionals as LinkedIn Influencers. Recent additions include Nissan CEO Carlos Ghosn, and CNBC (CMCSA) host Suze Orman.

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TheStreet Ratings team rates LINKEDIN CORP as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:

"We rate LINKEDIN CORP (LNKD) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income and disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Internet Software & Services industry. The net income has significantly decreased by 67.1% when compared to the same quarter one year ago, falling from $11.51 million to $3.78 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Internet Software & Services industry and the overall market, LINKEDIN CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Compared to where it was a year ago, the stock is now trading at a higher level, and has traded in line with the S&P 500. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry, implying reduced upside potential.
  • The gross profit margin for LINKEDIN CORP is currently very high, coming in at 87.06%. Regardless of LNKD's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, LNKD's net profit margin of 0.84% is significantly lower than the industry average.
  • LINKEDIN CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, LINKEDIN CORP increased its bottom line by earning $0.23 versus $0.19 in the prior year. This year, the market expects an improvement in earnings ($1.51 versus $0.23).
  • You can view the full analysis from the report here: LNKD Ratings Report

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