LinkedIn (LNKD) Headed into Favorable Product Release Cycle; Cowen at 'Outperform' Ahead of Q3 Release

Cowen and Company maintains LinkedIn (NYSE: LNKD) at Outperform with a price target of $253 heading into the company's Q3 report, which is expected out after markets close Thursday.

Analyst John Blackledge sees LinkedIn posted Q3 revenue of $573 million with adjusted EPS of $0.56, with the consensus at revs of $557.5 million and EPS of $0.47. The analyst commented:

Key 3Q14 Metrics: Customers, Members, and Sales Navigator

Key customer and user metrics for LNKD include:

i) the growth in Corporate Solutions customers, we forecast 29.9K in 3Q14, 1.8K adds, up 36% y/y vs. 39% y/y growth seen last quarter; and

ii) we will look for where Members finished the quarter (we forecast 329.9MM or +27% y/y).

Additionally, we will look for commentary around Sales Navigator following the release of the updated enterprise version in August. We are curious to hear about initial customer traction, the growth of the Sales Navigator sales force and the outlook into year end. Please see our deep dive on the Sales Navigator product here: LINK).

Sentiment: Mixed into the Print

Shares are up 11% since 2Q earnings on 7/31; however, shares peaked during the quarter in mid-Sept at ~$231 (down 14% from high). Sentiment is mixed. While many investors we have spoken with like LNKD longer term for strong management execution, user growth and promise of Sales Navigator, the stock isn't cheap at 7.6x EV/Sales and 27x EV/EBITDA on our '15 estimates. We like the stock here given the Sales Navigator catalyst and see 28% upside on our $253 price target.

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

LinkedIn closed at $199.51 yesterday.

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