NEW YORK (TheStreet) -- Shares of LinkedIn Corp (LNKD) are tanking, sharply down 19.7% to $202.46 on heavy volume in early market trading Friday, following price target cuts by two firms this morning.
Following the huge sell-off of LinkedIn shares in Thursday's after-hours session, SunTrust Robinson Humphrey and Brean Capital lowered their price target.
SunTrust lowered its price target to $250 from $275 with a "buy" rating, and Brean lowered its price target to $172 from $208 with a "sell" rating.
Both firms cited LinkedIn's disappointing outlook, after the professional networking site issued a weak second quarter and full year outlook late Thursday.
For the second quarter, the company expects earnings of 28 cents per share on revenue of between $670 million and $675 million. Analysts are expecting earnings of 74 cents per share on revenue of $717.5 million.
For the full year, LinkedIn forecasts earnings of $1.90 per share on revenue of $2.9 billion. The consensus estimate calls for earnings of $3.03 per share on revenue of $2.97 billion, according to Thomson Reuters.
Still, JPMorgan Chase analysts think the pullback is overdone.
The firm reiterated an "overweight" rating with a $300 price target, saying the headline numbers look worse than the actual business fundamentals.
For the first quarter, the company earned 57 cents per share, higher compared to the consensus estimate of 56 cents per share, according to analysts polled by Thomson Reuters.
Revenue for the period came in at $638 million, versus the $636.04 million analysts were expecting.
Earlier this month, LinkedIn bought online learning company Lynda.com for about $1.5 billion in cash and stock.
As of 9:59 a.m. ET, about 3.52 million shares of LinkedIn exchanged hands as compared to its average daily volume of 1.29 million shares.
LinkedIn is a professional network on the Internet with about 300 million members in more than 200 countries.
The company helps manage professional identity, ability to build and engage with professional networks, access to knowledge, insights and opportunities and ubiquitous access. It is based in Mountain View, CA.
Insight from TheStreet's Research Team:
James DePorre commented on LinkedIn in a recent post on RealMoney.com. Here is a snippet of what DePorre had to say about the stock:
The disaster that is LNKD this morning is the sort of thing that helps downtrends to develop further. This is a stock that has been an institutional favorite despite an aggressive valuation. Chasing expensive stocks has been the only way that big funds can put money to work in this market, but now they are paying a heavy price and are going to start questioning the potential for other expensive, momentum names to suffer in a manner similar to LNKD.
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Separately, TheStreet Ratings team rates LINKEDIN CORP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate LINKEDIN CORP (LNKD) a HOLD. The primary factors that have impacted our rating are mixed, some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and feeble growth in the company's earnings per share."
You can view the full analysis from the report here: LNKD Ratings Report