Earnings announcement season is in full swing and all I can say is bring on the momentum! On that note, three of this season’s most popular internet stocks (LNKD, BIDU and FB) are in the thick of earnings season so let’s take a moment to review these three growth stocks.
LNKD: A Prime Buying Opportunity
As I write, Wall Street is parsing through the latest third-quarter earnings numbers from LinkedIn Corp. (LNKD). The world’s largest profession network announced that LinkedIn membership jumped 38% year-over-year to 259 million members. According to CEO Jeff Weiner, “increased member growth and engagement helped drive strong financial results”.
Compared with Q3 2012, revenue jumped 56% to $393 million. Net loss for the quarter came in at $3.4 million, compared with net income of $2.3 million the same quarter prior year. Adjusted earnings weighed in at $0.39 per share, which trumped the $0.32 consensus estimate by 22%. Looking ahead to the fourth quarter, LinkedIn expects sales in the range of $415 million to $420 million. Investors reacted to this news because analysts expected Q4 revenue of $438 million. However, LinkedIn also raised its 2013 sales outlook to $1.5 billion, in line with the Street view. While shares are down slightly in after hour trading, I still consider this Moderately-ranked stock a good long-term buy.
Buy Don’t, Not Baidu
And in just a few minutes, China’s web services giant Baidu Inc. (BIDU) is due to report third-quarter results. I mention this because BIDU shares have a tendency to fall after earnings. And this time around it doesn’t appear that BIDU will turn any heads. The consensus is that Baidu will post just about flat earnings on 41% sales growth. However, if you’re really interested in BIDU, stay tuned—it is headed towards nearly 540% annual earnings growth next quarter! In the meantime, BIDU is a C-rated hold.
(As a side note: If you’re really looking for a strong play on China’s internet and mobile boom, I recommend just such a stock in my Blue Chip Growth newsletter. In fact, this is probably my top big internet stock on the market right now. This company is on a mission to overtake Baidu and is headed towards supercharged sales and earnings growth when it reports earnings in a few weeks.)
It’s Hard Not To “Like” FB’s Earnings
On the flipside of this coin is Facebook Inc. (FB), which is expected to do quite well when it reports quarterly results after the closing bell tomorrow. Right now, the analyst community is calling for net income of $0.19 per share on $1.91 billion in sales. This translates into 58% earnings growth and 51% sales growth! This is nearly triple the earnings growth forecast for the industry as a whole. And with Facebook accounting for just 4% of the digital advertising market, there’s room to grow from here. FB has recently improved in my Portfolio Grader screens, so it is now a B-rated buy.
I’ll continue to watch the newswires for the latest breakout earnings announcements. So if you want to keep a pulse on how the market is doing, please tune in to this daily blog as we progress through earnings season.