LinkedIn Had A 'Whopper Of An EPS'

Investors responded favorably to LinkedIn Corp LNKD, which reported better-than-expected results Thursday afternoon. The company's Q2 EPS came in at $0.55, beating the Street estimate by $0.15. Sales arrived at $712 million versus $679.78 million.

"They came in with a whopper of an EPS beat," Sean Udall, CIO of Quantum Trading Strategies and author of The TechStrat Report, told Benzinga. "To me the guide looks so-so. They're guiding in-line on EPS, slightly higher on revenues. Personally, I think that's why the stock is moving. It's not a stock I frequent a lot unless they kill it, but it looks like…analysts got too worried because of LinkedIn's [last quarter]. That always helps a company produce a better quarter -- when the quarter before got hit."

Udall believes LinkedIn's success is a result of analysts lowering the bar after a miss.

"It basically [created] easier metrics for the company to beat," said Udall. "If that $0.55 number is clean, that's a whopper of a beat. You gotta give 'em credit for that and the fact that they're raising the full-year guide. It's solid all the way around."

That said, Udall said that it is "kind of funny that you can beat up certain other names and reward a LinkedIn."

"It's a momentum name, kind of a cult favorite," he added.

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'Unexpectedly' Strong Quarter

Global Equities Research analyst Trip Chowdhry told Benzinga that LinkedIn had an "unexpectedly" strong quarter.

"But the company will be volatile," Chowdhry warned. "They will have hits and misses. There is no recipe defined for success. There is a lot of experimentation LinkedIn has to do to make sure they find the right recipe of monetizing their properties. It's a constant innovation they'll have to do."

Chowdhry said the stock as "fairly valued" at these levels because there is "still a lot of experimentation and learning to make sure they can have consistency in the revenue growth." He believes the firm has made progress in this regard.

Mobile Usage

Hannu Verkasalo, CEO of Verto Analytics (a startup that specializes in digital multi-screen media measurement), questioned LinkedIn's stats on mobile users.

"LinkedIn is claiming more than 50 percent of users on mobile, but Verto July 2015 measurement data indicates only 42 percent -- and only half of them on LinkedIn mobile app and rest on mobile web browser," Verkasalo told Benzinga.

"LinkedIn has not yet been able to build a strong mobile audience or app-centric/contextual use cases, which might limit their ad growth over the next one [to] two years, relative to Facebook, Google and even Twitter and Yahoo. Also, even though they have tried splitting properties out like Facebook, those spun out properties have not succeeded in gaining users yet."

Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.