Michael Graham, an analyst at Canaccord Genuity, raised his target price for LinkedIn Corp. (NYSE:LNKD). Based on the revenue generated by the business, increased estimates by the company and opportunity for new product, the price target was increased to $300 from $285. According to Mr. Graham, LinkedIn Corp. (NYSE:LNKD) is on the verge of exploiting a new opportunity, which could turn out to be a large source of income and revenue for the company. Therefore, pretty soon, the estimates will be raised by the company too and so, with this prediction, the analyst raised his price on the stock.

LinkedIn Corp. (NYSE:LNKD) has started a new platform for recruitment purposes. This platform is called “Talent Solutions”. The analysts believe that it has potential to grow stably in the short-term. The company has another new tool, “Sales Navigator”. About 200,000 subscribers are already using the tool and the rate at which it is being adopted is also good. LinkedIn Corp. (NYSE:LNKD) believes that its “Marketing Solutions” tool also has the most growth potential for the current fiscal year, 2015. Marketing Solutions is growing consistently; the volume is increasing, Sponsored Updates’ prices are also increasing and “Lead Accelerator” is a new tool which is being launched.

Canaccord increased their estimates for LinkedIn Corp. (NYSE:LNKD) for the fiscals 2015 and 2016. Canaccord’s previous estimates were that LinkedIn Corp. (NYSE:LNKD) will report sales worth $2,942 million in fiscal 2015. However, now the firm has raised their expectations to $2,947 million. As for the sales, the Canaccord firm had previously estimated that LinkedIn Corp. (NYSE:LNKD) would make $3,879 million, and now the estimate has been increased to $3,900 million. Meanwhile, the firm also increased their estimates on the EPS from $4.33 to $4.35.

Mr. Graham said that the LinkedIn Corp.’s (NYSE:LNKD) business has recurring revenue by nature. However, there are some key risks that the company faces and that Mr. Graham pointed out. One risk is that the fans of the company are super excited about the rights to stock and the other is the valuation challenge.

Currently, Canaccord’s analysts, Graham, has rated LinkedIn Corp.’s (NYSE:LNKD) stock at “buy”. Let’s take a wider view and look at the ratings of all the analysts who have given any rating to the LinkedIn Corp. (NYSE:LNKD) stock. Of these analysts, 30 have rated the stock “buy”, 10 have rated it “hold” and only two analysts have rated the stock “sell”. The consensus price on the stock for the 12-month duration is $289.08. Considering the closing price of the stock in the last trade session, this price indicates 8.5% return.

Currently the market capitalization of LinkedIn Corp. (NYSE:LNKD) is $33.15 million. During the Thursday trade session, LinkedIn Corp.’s (NYSE:LNKD) stock price increased by 0.55% and closed at $266.42.

LinkedIn Corp. (NYSE:LNKD) is a one of its kind social network. A network, that allows users to make their professional profiles, so that they can portray their skills and work experiences. Recruiters nowadays check LinkedIn profiles of their employees in several companies.

Although the shares of the company saw a decline immediately after the disclosure of the earnings, but it recovered soon with prices rising as much as 10 percent. The profitability of the company also increased in the non-GAAP segment, with an EBITDA (adjusted) margin of 300bps. It is pertinent to note here that the margin has seen a yearly increase of 27 percent.

LinkedIn Corporation (NYSE:LNKD), in order to improve the members’ engagement on the company’s platform, has planned to increase its efforts even further. The company has already redesigned the profiles of its members, strengthened the publisher network and smartphone ecosystem. Now, it plans to strengthen its newer geographies and improve the job listings.

The measures taken by the company have started proving quite beneficial as the engagement metrics have seen a growth over the third fiscal quarter.  Analysts are expecting improved numbers for the upcoming quarters, for the latest measures will have a positive impact on the monetization.  The company has introduced targeted ads for that matter.  The management of LinkedIn Corporation (NYSE:LNKD) is of the opinion that the revenues will fall in the range in $600 to $605 million for the fourth quarter of the year. The analysts, on the other hand, think that the company will cross these figures.

Many of the market researcher firms are even revising their estimates and target prices for LinkedIn.

The strategies that the company employed resulted in an increased user engagement for 3Q. The cumulative members of LinkedIn increased by 28 percent and the number reached to 332 million. As far as the member page views and unique visiting members are concerned, the figures rose by 28 percent and 16 percent respectively; for the previous quarter, the numbers were recorded to be at 22 percent and 13 percent.

The members of LinkedIn are increasing because the company is posting more job listings on its platform. The company, at the start of the year 2014, started aggregating job offerings from other sites as well, under the title “Limited Listings.”

Moreover, previously, it only covered the job listings of U.S., but now it covers the whole world. This change increased the job listings from 1 million to 2 million and hence attracted more members. LinkedIn Corporation’s (NYSE:LNKD) mobile strategy also brought in a number of new members during 3Q. The mobile traffic increased from 43 percent to 47 percent during a period of 2 quarters.

Talking about the stocks of the company, LinkedIn Corporation (NYSE:LNKD), during the recent trading session of November 4, 2014, opened its stocks at a price of $232.49 and closed at a much increased price of $238.43, after hitting the highest figures of $238.77. The company has a total market capitalization of $28.98 billion.

As with any stock that trades at such a high multiple of its current earnings, the real question is if the stock will live up to those expectations over the next few years. Can Twitter discover a way to increase user engagement with users that do not post or generate content? These issues plague Facebook as well, who is struggling with losing prime teenage users and could possibly have reached its peak. It all depends on how an investor sees those situations, and whether to buy or sell the stock.

Declining User Growth and Low Revenues Per User

Twitters most pressing problem right now that that its user growth is falling short of expectations in monthly active users. This metric is only growing by 24 percent year over year. The company counted a total of only 271 million at the end of the second quarter of 2014, which dwarfs in comparison to Facebook’s 1.3 billion user count at the end of the same quarter. Investors can see that as an opportunity to grow or a sign of a failing service.

Those numbers directly affect advertising revenue. Twitter’s timeline views hit 173 billion during the second quarter of 2014. This metric determines how much engagement users are having with the microblogging site, and is much more important than the total number of users the site has. The company’s timeline views increased only 15 percent year over year, a concerning small rate of growth. To be fair, Twitter did streamline conversations into a single timeline view, which had a small affect on the actual growth rate. Additionally, the company’s management board is determined to push forward with this plan, convinced that it will decrease views per user while increasing the site’s efficiency by displaying more relevant data to them.

Twitter’s average revenue per user for the second quarter of 2014 reached $1.02. This figure is significantly lower than Facebook’s, most likely because Twitter is one year behind Facebook’s efforts to make money off of users. Facebook reported an average revenue per user of $2.24 for the second quarter. Last year, the social media giant had only $1.60 in revenue per user.

The key metric that Twitter uses is advertising revenue per thousand timeline views. This metric hit $1.60 in the second quarter of 2014, which was a 100 percent increase year over year. Thus, Twitter is experiencing marginal user growth as well as significant increases in advertising demand.

Growth Rate

Analysts are predicting that the company’s 5 year earnings growth rate will be roughly 112 percent. Other industry experts are reaching even further and forecasting a 200 percent growth rate for the microblogging company.

GSV Capital Reduces Risk

The most preferable way to invest in Twitter is via GSV Capital (NASDAQ:GSVC), an investment fund company. The fund’s shares trade at a significantly lower rate to NAV, and given that Twitter is the largest position, this is a way to limit the downside risk in owning to directly buying Twitter’s stock, which is known for its wild swings in price.

Currently, GSV Capital shares trade around the $10 mark, even though the NAV was roughly $14.8 at the end of the second quarter of 2014. The investment fund controls about 50 investments in venture capital companies, but its largest investment is in Twitter, which the fund holds 21.1 percent stake. GSV Capital has risks that certain other dominant positions in private companies, such as Dropbox or Palantir Technologies, lowers in value, which then offsets the NAV safety net.

Conclusion

At the end of the day, in order to intelligently invest in Twitter, which trades at a multiple of over 120 times its earnings for 2015 and has a valuation of more than 10 times its revenues, investors must depend on the future of the microblogging site. If Twitter becomes the news source for the world, then its valuation and price of its shares today are dirt cheap compared to its future. The company has so much opportunity to grow its user base and widen its average revenue per user to catch up with the levels reported by Facebook.

The Twitter stock could be considered cheap given its metrics for valuation and the low risk method of investing in it through GSV Capital. Of course, if you are absolutely certain that Twitter will rival Facebook in valuation one day in the future, then by all means buy directly into the Twitter stock to capture all the benefits and upside.

The professional social networking giant announced plans to focus on target sales teams, having been unsatisfied with the results from just corporate recruiters.

The company also revealed a new redesigned and improved version of its Sales Navigator software. LinkedIn will offer this service on its own as a subscription service. Prior to this announcement on Thursday, the Sales Navigator software was a part of LinkedIn’s main services and was directly primarily towards individual users. According to the company, the new software will cater to salespeople by searching LinkedIn’s 313 million user database, suggest potential customers for salespeople, find mutual acquaintances and connections, and help introduce the two parties.

For the second quarter, the company reported an increase in revenue of 47%, from last year’s $363.7 million to $534 million. This growth rate is slightly quicker than its growth rate during the first quarter, which was 46%.

However, the company was unable to turn a profit, and reported a net loss of $1 million. This is partially due to its acquisition in February of Bright, a company that makes use of data to connect job searchers with employers. In the same quarter last year, LinkedIn reported a profit of $3.7 million.

Excluding these costs, LinkedIn claimed that it would have earned $0.51 per share, and increase from the $0.38 per share one year earlier. Analysts had forecasted earnings of $0.39 per share.

Additionally, LinkedIn’s membership count increased from 296 million to 313 million in the first quarter of 2014. Unique visitors increased by a slight margin, but its total page views dropped from 26.9 billion views last quarter to 25.4 billion views this quarter.

The company’s chief financial officer, Steve Sordello, attributed this tumble in page views to the atypically high engagement that the company experienced in the prior quarter, due to the site’s new features.

After dropping 3.5% to $180.64 during day time trading, the company’s shares increased 7.5% in after hours trading. Over the past year, LinkedIn’s stock price has decreased 13%, which reflects weakening revenue growth rate.

According to the company, traffic from mobile devices make up 45% of its overall traffic, an increase from the 43% last quarter.

The company’s growth was likely supported by its mainstay Talent Solutions unit, which provides services to corporate recruiters and staffers for human resources. In that unit alone, revenue grew 49% to $322 million, accounting for about 60% of the company’s overall revenue. Revenue from advertising increased to 44% to $106 million. Premium subscription revenues grew 44% to $105 million.

An analysts from Sterne Agee stated that LinkedIn’s results were one of the best that the company has reported over the past 1.5 years. He believes that the company’s expansion into China earlier this year could yield long term profits and growth. Additionally, he praised the company’s new sales product as a good method for future growth as well.

With its deepening focus on sales, LinkedIn is trying to break into a huge market and drive its growth upwards. Back in May, the company’s chief executive Jeff Weiner announced that the company was involving itself in more research and development in the sales software business, and generated much excitement for a new lead generation service.

The new program could usher in new period of social selling, where salespeople use social media to learn about the thinking of potential buyers, find them, and get connected via common members of their networks of connections. The CEO of LinkedIn predicts that the sales tools of LinkedIn could possibly grow to be as large as the company’s recruiting business.

An analyst from JP Morgan stated that he saw promising prospects for LinkedIn’s new product, and sees it as more functional than previous versions in that it can be sold primarily to companies, instead of individuals.

According to a partner at Sequoia Capital, a venture capital firm, the concept of using machine learning technology to aid salespeople to develop leads is a rapidly growing and lucrative space.

Now that LinkedIn is moving into sales, it will need to compete against the leader in the sales industry, Salesforce.com.

Founded in 2003, LinkedIn Corp (NYSE: LNKD) is the largest professional network on the Web in the world, with more than 300 million users. Its users include executives from every Fortune 500 company, and aims to make professionals around the world more productive and successful. The company boasts a diversified business model, and has revenue coming in from Talent Solutions, Premium Subscriptions, and Marketing Solutions products. The company is based in Silicon Valley, but has offices all around the world.

Bizo is a leading company in business audience marketing. The company provides technology and products that allow users to measure display and social advertising programs that are specifically geared towards professional audience divisions. Founded in 2008 by Bryan Burdick, Russel Glass, Mark Dye, Lee Bryne, Donnie Flood, and Yonatan Stern, the company is based on San Francisco. It raised a total of $20 million in venture capital funding, and its investors list includes Crosslink Capital and Bessemer Venture Partners. The company also has $12.5 million of debt. Last year, the company did about $22 million in revenue.

Sources say that LinkedIn paid roughly $175 million for Bizo – about 10% in stock and 90% in cash. The transaction is expected to close during the third quarter of 2014.

Business to business markets use Bizo to target prospective clients in the professional segment of the market. Bizo guides marketers at each step in their sales and marketing path. Powered by exclusive data management and targeting technology, Bizo’s platform provides users accurate and measurable multi-channel marketing campaigns. The company has helped brands meet their objectives by determining and displaying the right message to the right audiences on the Internet.

Deep Nishar, the SVP of Product and User Experience at LinkedIn, expressed his excitement in being able to bring Bizo’s expertise and technology into LinkedIn’s space. “Our ability to integrate their B2B solutions with our content marketing products will allow us to grow and develop into the most effective platform for B2B marketers to engage professionals.”

Russell Glass, CEO and Co-Founder of Bizo, stated that the company has been a partner of LinkedIn for some time, and it has become certain that the two company’s goals and cultures and very much compatible and well fitted for each other. Glass said, “I couldn’t be more excited that our two companies are joining together to increase our ability to get to professional audiences, nurture prospects, and gain customers in truly amazing ways.”

The company also expects that many members of Bizo’s team will join LinkedIn’s staff.

The bankers, more often than not, do not keep an eye on the stocks. However, the Federal Reserve recently revealed some stretches in the biotech and social media sector. Fed says that value metrics for some smaller companies have been made to seem stretched.

The news is not tremendous and earth-shaking for those people who keep up with the equity market since the social media and biotech stocks have shown pullbacks in the recent past as well; the shrinking of stocks resulted due to decreased valuation. According to Ed Yardeni, the president of Yardeni Research, a financial and investment advisory firm, the news that Fed broke to the market was not new for professionals. He further stated that it looked like as if the Feds had been following the newspapers.

However, since the word was given by Feds this time, a complete chaos took over the market and people started off selling their stocks in Wall Street.

Although the Feds mentioned stretching of “smaller” companies’ stocks, the news affected the stocks of big giants as well. Stocks of Amgen (NASDAQ:AMGN) and Facebook (NASDAQ:FB), two big companies, fell down by 2 percent. Similarly, stocks of two medium sized social media companies, Twitter (NASDAQ:TWTR) and LinkedIn (NASDAQ:LNKD) slumped by 1 percent.

Feds’ warning did not only affect the social media and biotech stocks, rather it affected the whole market: the composite of Nasdaq shed by 1 percent. It is important to note here that Nasdaq is an American Stock Exchange and its market capitalization makes this stock exchange the second largest in the world. Many biotech and social media companies are registered with Nasdaq.

Interestingly, even with falling values, the social media and biotech stocks are still expensive in the market. Stocks of Vertex Pharmaceuticals (NASDAQ:VRTX), an American company in the field of biotechnology, fell down by 2 percent following the Feds’ disclosure. However, as of Monday, the stocks have a (P/E) price to earnings ratio of 136; such a high P/E makes Vertex Pharmaceuticals (NASDAQ:VRTX) the second-most expensive company in the Nasdaq 100. Similarly, Facebook, the most popular social media company, has a price to earnings ratio of 37, which is quite high when compared to other stocks registered on the same stock exchange.

Global Equities’ Managing Director, Steve Weeple, said that biotech stocks have huge value in other areas of this industry. According to the managing director, there are some very strong companies in the biotechnology industry, like Celgene (NASDAQ:CELG), Gilead (NASDAQ:GILD) and Amgen (NASDAQ:AMGN), which deserved the analyst firm’s ratings as there exist no ‘concept stocks’ anymore.

Where the Federal Reserve, in its monetary policy report, warned about the potential stretching in the stocks of some companies, particularly the small companies in the biotech and social media arena; the central bank, on the other hand, has not commented on this news, nor is it worried about the market.