NEW YORK (TheStreet) - LinkedIn (LNKD) shares tanked 5.63% to $152.15 in Friday trading as investors digested the company's first-quarter results and weaker-than-expected guidance. Wall Street, however, remained a big fan of the professional social network.
The Mountain View, Calif.-based firm reported first-quarter revenue of $473.2 million, a 46% hike on the prior year's quarter, and comfortably above Wall Street's estimate of $467 million.
Excluding items, LinkedIn earned 38 cents a share on net income of $47.3 million, compared to 45 cents a share and $52.4 million in the prior year's quarter. Analysts were looking for earnings of 34 cents a share.
LinkedIn's talent solutions revenue climbed 50% year over year to $275.9 million and its marketing solutions revenue rose 36% to $101.8 million over the same period. Premium subscriptions revenue increased 46% to $95.5 million.
Set against this backdrop, analyst sentiment toward LinkedIn's numbers has been largely positive, with UBS upgrading the company to "buy" from a prior "neutral" rating. UBS cited LinkedIn's sustainable first mover advantage as a social network for the professional community.
Stifel analyst Michael B. Purcell, however, noted that the company did not provide any update on its total member counts in China, which could have served as a catalyst for the stock. Stifel nonetheless maintained its LinkedIn "buy" rating, citing the platform's relevance and utility, but lowered its price target to $240 from $285 on slightly lower multiples.
The company's guidance has spooked investors. For the second quarter, LinkedIn said it expects revenue between $500 million and $505 million and adjusted EBITDA of $118 million to $120 million. Analysts surveyed by Thomson Reuters were looking for sales of $505.1 million and EBITDA of $120.34 million.
For the full year, LinkedIn predicts revenue between $2.06 billion and $2.08 billion and adjusted EBITDA between $505 million and $510 million. Wall Street had predicted full-year sales of $2.11 billion and EBITDA of $514.37 million.
Here's what analysts are saying about LinkedIn's first-quarter numbers:
Evercore analyst Ken Sena (Overweight, $240 Price Target)
"LinkedIn reported strong 1Q14 earnings, with revenue performance across business segments, margins, and a raised FY guide all better than expected. We continue to like shares and see new content programs, tool capabilities, and geographic opportunities as offering an expansive addressable market on a business with strong competitive barrier and scalable margin potential. However, we do concede that some volatility in shares is likely to remain as engagement growth metrics compress through 2Q14 & 3Q14 on tougher comps and a shift in specific customer focus across business segments show some evolution."