"Still, even good companies should be bought for less than they are worth.
Our fair value estimate of $27 assumes LinkedIn extends its dominance as the preferred social-networking site for professionals. We are forecasting annual revenues to increase 43% during the next five years, as combined revenues from hiring solutions and advertising reach more than $1.3 billion. We are also assuming generally accepted accounting principles operating margins reach the mid-20s by 2015.
So, by Morningstar’s measure, LinkedIn is 270% overpriced, even with all these positives. Be careful out there."
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