Still No Margin of Safety in LinkedIn Shares

LinkedIn posted strong double-digit growth in all three segments (talent solutions, marketing solutions, and premium subscriptions) for the fourth quarter, growing total revenue by 34% (37% excluding currency effects) to $862 million. Talent solutions, the largest segment, grew 45% as the company's registered members exceeded 400 million for the first time. Along with the 19% growth in members, the firm also posted 40% annual growth in members sharing content and doubling of open job listings. The large growth in usage by both members and corporations highlights the company’s unique position at the top of the professional social networking market as well as the sticky nature of its platform.

Management continued to focus on growth and engagement this quarter, strengthening our belief that LinkedIn remains focused on user experience over near-term revenue contribution. The firm launched its new flagship mobile app last quarter which allows R&D to quickly test out new features. LinkedIn will also launch new products in 2016 for recruiters including an easy-to-use suite of all hiring tools and launching tools to help with long-tail hiring.

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