Near-Term Hiccups At LinkedIn Don't Alter Long-Term Opportunity, Cantor Says

Cantor Fitzgerald’s Youssef Squali maintained a Buy rating on LinkedIn Corp LNKD, with a price target of $210.

Opportunities Abound

Squali believes that the company’s addressable markets, differentiated offerings and emerging but promising opportunities, along with a lower valuation warrant a Buy rating.

Following an investor meeting, the analyst believes that “1) the fundamentals and market opportunity for LNKD remain largely unchanged; 2) field sales growth remains healthy; and 3) deceleration is largely coming from online sales.”

Squali mentioned that management intended to reverse this slowdown with the introduction of a “Recruiter” offering in 2017, tailored to the need of SMBs.

Sales Expectations

Field sales at the company’s Talent Solutions business continue to be robust, with the FY16 guidance implying revenue growth in the mid-20 percent. Squali pointed out that this would consist of 20 percent customer growth and mid-single digit pricing growth.

Online sales growth, however, is expected to decline in 2016 to the single digit range, from 30 percent in 2015.

“LinkedIn continues to target 780M knowledge workers globally, with $27B TAM for Talent Solutions alone. Notably, the trend in North America remains positive, while EMEA and APAC are likely to reflect negative FX and oil/gas impacts for some time,” the analyst added.