LinkedIn (LNKD) Down In Early Morning Trading

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.

Trade-Ideas LLC identified LinkedIn ( LNKD) as a pre-market laggard candidate. In addition to specific proprietary factors, Trade-Ideas identified LinkedIn as such a stock due to the following factors:

  • LNKD has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $436.8 million.
  • LNKD traded 76,413 shares today in the pre-market hours as of 9:26 AM.
  • LNKD is down 2.1% today from Friday's close.

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More details on LNKD:

LinkedIn Corporation operates an online professional network. Currently there are 19 analysts that rate LinkedIn a buy, no analysts rate it a sell, and 9 rate it a hold.

The average volume for LinkedIn has been 1.7 million shares per day over the past 30 days. LinkedIn has a market cap of $24.9 billion and is part of the technology sector and internet industry. The stock has a beta of 1.55 and a short float of 7.5% with 3.91 days to cover. Shares are up 7.9% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates LinkedIn as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 27.8%. Since the same quarter one year prior, revenues rose by 44.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • LNKD has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 3.44, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for LINKEDIN CORP is currently very high, coming in at 86.82%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -0.75% is in-line with the industry average.
  • 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 26.8% when compared to the same quarter one year ago, falling from -$3.36 million to -$4.26 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.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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