Is This a Buying Opportunity for LinkedIn?

Is This a Buying Opportunity for LinkedIn?

The last few months have been tough for LinkedIn investors with the stock down nearly 20% from its all-time highs. Investors quickly soured on the social-media job networker after fourth-quarter guidance wasn't as high as consensus estimates.

Facebook suffered the same fate as an initial positive earnings report was quickly overshadowed by negative comments on the conference call. These two events pointed to a repricing in the social-media landscape.

However, that narrative was quickly changed with Twitter's successful IPO. Twitter quickly jumped from $26 per share to $45, and is priced at an astonishing price-to-sales ratio of 55.

As far as valuation is concerned, LinkedIn is priced at the lowest price-to-sales ratio and also has the lowest value per active user. Also, with three revenue-driving divisions, LinkedIn is more than just an advertising model.

Watch Jamal Carnette discuss if LinkedIn is a great long-term investment with Evan Niu, CFA.

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The article Is This a Buying Opportunity for LinkedIn? originally appeared on

Evan Niu, CFA owns shares of LinkedIn. Jamal Carnette owns shares of Facebook. The Motley Fool recommends Facebook and LinkedIn. The Motley Fool owns shares of Facebook and 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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Originally published