Axiom Maintains A Buy On LinkedIn, Cites Strong Topline Growth Of Core Talent Solutions Business

• Shares of LinkedIn Corp (NYSE: LNKD) have declined 23.87 percent over the past three months, to a low of $188.03 on January 27.
• Axiom’s Victor Anthony has maintained a Buy rating on the company, while lowering the price target from $285 to $210.
• Calling the market reaction to the below consensus 2016 guidance an “overreaction,” Anthony believes that the company to post “several beat-and-raise” quarters in 2016, which should drive the stock.

Analyst Victor Anthony mentioned that LinkedIn reported strong results for 4Q15, with revenue, adjusted EBITDA and non-GAAP EPS ahead of the estimates.

“The results were solid and followed a solid 3Q15 print as well after a tough 1H2015f,” Anthony said.

Related Link: LinkedIn's Guidance Sends Stock Crashing More Than 25%

However, the 2016 revenue guidance was 5 percent below consensus, while adjusted EBITDA was 1 percent below consensus. The company attributed this to the weakening macro environment in the APAC and EMEA, FX headwinds of 200 bps, removed of $50 million from Bizo and the “phasing out of the lead generation business.”

Of all these reasons, Anthony expressed concern regarding the macro expectation, stating there were likely to be concerns regarding meaningfully slow growth in 2H16, as well as what this would mean for LinkedIn’s longer term growth profile.

“However, we point to the continuation of the strong topline growth of the core Talent Solutions business as reason to continue with the growth story,” Anthony added.

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