RBC Capital Boosts PT on LinkedIn (LNKD) to $300 Following Solid Q3 Results, Outlook

RBC Capital lifts its price target on Outperform-rated LinkedIn (NYSE: LNKD) from $275 to $300 following strong Q3 results and guidance on Thursday night.

Analyst Mark Mahaney noted the following keys from the report:

1. Hiring Revenue Growth Acceleration – To 39% Y/Y ex-FX vs. 36% in Q2 and first quarter of acceleration in a long time;
2. Metrics Solid – Registered Members of 396MM, up 19% Y/Y, while Corporate Customer Net Adds of ~2.3K were up Y/Y;
3. Sponsored Updates Shine – Doubled Y/Y and now accounts for over half of Marketing Solutions;
4. Sales Navigator Chugging Along – Modestly grew Q/Q and continues to account for over 1/3rd of Premium Subs revenue…still not growing as quickly as we would like, but record deal with EY should help in ’16.

Mahaney also offered the following estimate changes: 2016 Revenue/EBITDA estimates rise 1%/2% while we raise our PT to $300 (prev. $275) based upon a 27x EV/EBITDA multiple to our 2017 EBITDA estimate of $1.4B and an 8X P/S multiple on our 2017 Revenue estimate of $4.8B, justified by LNKD’s premium growth outlook: 3-year 25%/34% Revenue/EBITDA CAGRs through 2018.

For an analyst ratings summary and ratings history on LinkedIn click here. For more ratings news on LinkedIn click here.

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