Is LinkedIn a Solid Investment?

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With shares of LinkedIn (NASDAQ:LNKD) trading around $235, is LNKD an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

LinkedIn is a professional network on the Internet with more than 90 million members in over 200 countries and territories. Through the company’s platform, members are able to create, manage, and share their professional identity online as well as build and engage with their professional network, access shared knowledge and insights, and find business opportunities. It’s platform also provides members with applications and tools to search, connect, and communicate with business contacts, learn about career opportunities, join industry groups, research organizations, and share information. Networking and social contact is rising in importance for consumers and companies all around the world.

Analysts from BMO Capital have upgraded LinkedIn from Market Perform to Outperform and raised their price target on the company’s shares from $235 to $270, as the firm believes a formal launch of LinkedIn in China is on the horizon. “We believe there are several new stories emerging that will raise long-term growth expectations; in particular, we believe LinkedIn is preparing to formally launch in China. Management has discussed this idea previously, and we learned from a separate NDR with MDC Partners that one of their agencies has been hired to begin a public relations outreach for LinkedIn in China,” BMO analyst Daniel Salmon said in a note seen by Street Insider. “We assume a formal launch in 2014, with monetization beginning to ramp in 2015.”

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