Bearish sentiment on LinkedIn deepened after the earnings announcement. About 58% of investors on StockTwits.com anticipate further declines, according to StockTwits analytics.
Some investors said that the tenor of the questions on the LinkedIn conference call indicate that analysts will downgrade the stock. Analysts asked pointed questions about the number of users who see display ads on LinkedIn's homepage and about monetization efforts in China.
$LNKD As you may have noticed, none of the analysts congratulated the company so far on the CC. Means downgrades tomorrow.-- Mike (@scottsdalem) May. 1 at 05:47 PM
$LNKD: look for a few analysts to downgrade tomorrow. Today's results were just too weak to justify the stock's current price.-- tryingtomakeabuckinthemarket (@contrarianspeculator) May. 1 at 09:50 PM
Bulls disagreed that downgrades were in the works. They argued that LinkedIn's business was strong and that, unlike other social networks vying for ad dollars, the company enjoyed a niche with few competitors that justified its near $19.4 billion market cap.
$LNKD Great company with wide moat just was priced for perfection - ER not perfect, hence sell off-- Omar (@TheStacks) May. 1 at 06:18 PM
But many others doubted that LinkedIn was reasonably priced, given the lack of profits. The company trades at 65 times expected 2015 earnings.
$LNKD is fantastic company but it doesn't worth 20 bln-- kh (@khmusabaev) May. 1 at 05:23 PM
StockTwits users also raised concerns about the limited number of paying users on LinkedIn. Recruiters and firms seeking to hire employees pay to post jobs on LinkedIn and access profiles on the site. LinkedIn management said Thursday that the site has 1.5 million recruiters and 4 million human resource professionals.