“We understand the rationale (and this possibility had been telegraphed by ), but these two largely self-inflicted moves will likely overshadow the still healthy/encouraging trends in the business and outlook,” the analysts wrote. That said, the analysts said the outlook and killing off the lead accelerator will be the prominent story for investors. The analysts said LinkedIn’s fourth-quarter earnings show that the company has a solid core business. Macquarie Research analysts lowered the price target to $225 from $260 but reaffirmed a buy rating.Credit Suisse analysts lowered LinkedIn’s price target to $230 from $330, but maintained an outperform rating based on LinkedIn’s growth in corporate customers - which has more than 43,000 customers - the potential to increase prices for the company’s sponsored updates channel and use of ad-targeting in the future.“Our thesis was predicated on increasing SaaS-based components of the business supplying greater earnings visibility, diminishing contribution from volatile segments like premium display, and being home to a platform well conducive to native mobile advertising,” the analysts wrote. Monness, Crespi & Hardt downgraded LinkedIn to neutral from buy, saying that the company’s outlook, which includes headwinds for the company’s hiring business, doesn’t fit with their thesis.The analysts were concerned about the deceleration in Talent Solutions in 2015 and the guidance, which expects a deceleration of about 25% in that segment 2016 in addition to headwinds and the phasing out of the lead accelerator product. Morgan downgraded LinkedIn to neutral from overweight and cut the price target to $186 from $300. Ugh,” the analysts wrote.īut, they added that they believe the stock reaction is “overdone.” “Now Sales Navigator really is LinkedIn’s only big near-term opportunity to materially increase the monetization of its data set. They called exiting Bizo a “gigantic mistake” and said the company will have to spend the rest of the year restoring investor confidence in the company. Pacific Crest analysts cut the company’s price target to $190 from $280 and maintained an overweight rating.The company had acquired Bizo for $175 million in July 2014. “While initial demand was solid, the product required more resources than anticipated to scale,” Steven Sordello, the company’s chief financial officer, said on the call.
This move will cost about $50 million in potential revenue in the short-term.
In addition to the weak guidance the company provided late Thursday, analysts pointed to Thursday’s earnings call, when the company said that it would phase out its “lead accelerator” product, created out of a recent acquisition, and incorporate the technology into its sponsored content segment.
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