Why LinkedIn Shares Skyrocketed
What: Shares of online professional-networking service LinkedIn soared 22% today after its quarterly results easily topped Wall Street expectations.
So what: LinkedIn's Q4 results -- adjusted EPS of $0.35 on whopping revenue growth of 81% -- mark the seventh consecutive quarter in which it has blown out expectations, prompting analysts to boost their growth expectations yet again. In fact, LinkedIn's user base jumped 39% to 202 million users, while visitors viewed 67% more pages than the previous year, suggesting that management's efforts to revamp profile pages and offer more interesting features are gaining traction.
Now what: The company maintained its full-year revenue forecast of $1.4 billion, representing an increase of about 45% over last year.
"Continued investment in our talent and technology infrastructure drove momentum in both product and monetization, resulting in record revenue, profitability, and cash flow," said CFO Steve Sordello. "As we look forward to 2013, we remain excited about the value LinkedIn will create for members and customers in the coming year."
Unfortunately, with the stock now up about 95% over the past year and trading at a rather lofty forward P/E of 70, there isn't much room for error, as well.
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The article Why LinkedIn Shares Skyrocketed originally appeared on Fool.com.Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool recommends LinkedIn. The Motley Fool owns shares of LinkedIn. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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