Category Archives: oud

How LinkedIn Turned A Bad Business Situation Into Good

It was a shocking day for LinkedIn ( LNKD ) when the business networking company reported fourth-quarter earnings on Feb. 4 that led to a 44% plunge in its stock price. In its Q4 earnings conference call, LinkedIn executives revealed a company reshuffling that had many observers scratching their heads. Analysts slashed price targets as LinkedIn announced it would shutter a unit worth about $50 million in revenue, a move one analyst called a “gigantic mistake.” Apparently it wasn’t. LinkedIn committed new resources toward newer products that cashed in when the company reported first-quarter earnings  after the close Thursday that walloped expectations. LinkedIn reported Q1 revenue of $860.7 million, up 35% year over year and beating the consensus of $828.5 million. Earnings per share minus items rose 30% to 74 cents, beating the consensus of 60 cents, as polled by Thomson Reuters. Its guidance also exceeded views. “We believe LinkedIn righted its ship with a solid first-quarter upside and raised guidance,” wrote Needham analyst Kerry Rice, who maintained a buy rating and price target of 200. Many of the issues LinkedIn revealed were not as severe as expected, Rice wrote in a research note. LinkedIn generates revenue from three business segments. Revenue from Talent Solutions, which gets fees from companies and headhunters seeking hires, rose 41% to $558 million. Revenue from Marketing Solutions, which sells ads, increased 29% to $154 million. Revenue from Premium Subscriptions increased 22% to $149 million. In its reshuffling, LinkedIn created products such as Referrals and Connectifier, online platforms that help customers drive a greater share of hiring through LinkedIn. In its Marketing Solutions unit, LinkedIn redoubled its focus on Sponsored Content. which provides targeted advertising that appears in the feeds of social platforms on LinkedIn. These new products and others were a significant contributor that helped LinkedIn beat expectations. Sponsored Content revenue rose 80% and is the fastest-growing segment of Marketing Solutions, LinkedIn said. “LinkedIn posted Q1 upside across every business unit,” wrote Pacific Crest analyst Evan Wilson in a report. “We are confident in LinkedIn’s uniquely valuable data set and think the company has set itself up for further upside over the balance of the year.” Wilson has a overweight rating on LinkedIn stock and a price target of 190. Jefferies has a buy rating and price target of 180. RBC Capital Markets has a market perform rating and price target of 160. Nomura has a buy rating and price target of 180. LinkedIn stock was up 3%, near 126.50, in afternoon trading in the stock market today . Since the 44% plunge three months ago, LinkedIn stock is up 15%. Image provided by Shutterstock .

Gilead Sciences Takes Lumps From Wall Street After Q1 Miss

Big biotech Gilead Sciences ( GILD ) got a downgrade and several price-target cuts Friday after its Q1 report missed expectations , sending its stock tumbling. Maxim Group analyst Jason Kolbert downgraded Gilead to hold from buy, noting that the record-breaking launches of hepatitis C drugs Sovaldi and Harvoni were coming up against competition and tough year-over-year comparisons. “New patient numbers increased … but product margins per patient were lower as a result of: 1) increased HCV price competition ( Merck ‘s ( MRK ) Zepatier); 2) an increased discount rate; and 3) higher-than-expected rebate claims,” Kolbert wrote in his research note. “While management believes that HCV products have stabilized (the U.S. market share is at about 90%), we are not so sure.” Leerink analyst Geoffrey Porges lowered his price target on Gilead to 123 from 127 but maintained an outperform rating. He noted that the company still has a huge reserve of cash, and wrote that the HCV franchise was eroding earlier then expected but it was presumed to decline in a few years anyway. “As a result, our EPS estimates fall 8%-10% through 2017, but only 3% beyond,” he wrote in his research note. UBS analyst Marc Goodman also kept his buy rating while lowering his price target to 118 from 130, writing that he’s “willing to have a little patience.” “The (HCV) category still has years ahead of stable patients,” Goodman wrote. “The issue remains; what’s next? … At this valuation, we will try to remain patient.” Gilead stock was down 7.5% in afternoon trading on the stock market today , below 90. On the positive side for Gilead, the company said Friday that the EU’s Committee for Medicinal Products for Human Use, which advises Europe’s equivalent of the FDA, had endorsed approving Odefsey, the company’s newest four-drug combo pill for HIV. The combo includes TAF, known on Wall Street as “son of Viread” as it represents an upgraded version of Gilead’s legacy blockbuster Viread, which is due to go off patent in the near future.

Baidu Zooms On ‘Solid’ Search Growth, ‘Very Strong’ Revenue Outlook

Baidu ( BIDU ) stock shot up Friday after China’s Internet search leader gave a Q2 outlook above consensus late Thursday while posting Q1 earnings and revenue that beat and met, respectively, Wall Street views. Baidu posted “solid results on core search” along with “very strong” revenue guidance for Q2, ITG Investment Research analyst Henry Guo told IBD via email Friday. China’s slowing economic growth “has no impact on advertisers spending,” Guo said. “Local merchants continue to embrace search advertising as mobile helps Baidu penetrate into local, expanding its advertiser base.” Brean Capital on Friday upgraded Baidu stock to buy from hold. Baidu, often referred to as China’s Google, is investing heavily in services ranging from online payments to online-to-offline transactions including food delivery. And, like Alphabet ( GOOGL )-owned Google, Baidu is spending on research and development of driverless cars. Baidu stock was up 6.5% in midday trading in the stock market today , near 198, its highest level since mid-December. Baidu stock has gained 96% since hitting a nearly three-year low of 100 in late August, but shares have fallen 10% over the past 12 months. Baidu revenue rose 31% year over year in local currency to RMB 15.821 billion ($2.454 billion). That’s above the $2.44 billion that Factset had expected and fell in line with the RMB 15.83 billion analysts polled by Thomson Reuters were looking for. Baidu said that its Q1 revenue excluded Chinese online travel agency Qunar Cayman Islands. In October, Baidu-backed Qunar announced a share swap with Ctrip.com ( CTRP ), another leading Chinese online travel agency. Baidu now owns 3% of Qunar. Baidu also owns 25% of Ctrip, which owns 45% of Qunar. Mobile revenue represented 60% of total revenue in Q1, up from 50% in Q1 2015, Baidu said. Baidu reported EPS ex items of RMB 6.80 ($1.05), down 12% year over year. Still, that’s above the RMB 5.96 analysts polled by Thomson Reuters had expected. For Q2, Baidu guided revenue ranging from RMB 20.110 billion ($3.12 billion) to RMB 20.580 billion ($3.19 billion), representing an increase of 21% to 24% year-over-year in local currency. On an apples-to-apples basis, excluding Qunar from Baidu’s financials, Baidu said that the guidance represents a 28%-31% year-over-year increase in RMB.