LinkedIn briefly tops $100 after analyst upgrade

LinkedIn $LNKD is up marginally today but if you remember we owned this name as a short holding in the DWCM fund.  Since closing out the position at a loss last month, LNKD has continue to press higher along with the rest of the markets.  Just this week is managed to touch the $100 price level again based on an upgrade from Goldman Sachs.

I disagree with the upgrade as the stock currently sports a fwd P/E of 83.9.  I just don't see how LNKD will generate enough profit to justify to grand multiple just like many of it's other recent social networking peers.  While LNKD remains one of the profitable social networking companies they expect to turn their users currently using the services for free (like myself) to paying consumers.  I think that will be a tough sell when most people expect content or access to services LNKD provides to be free.  Also when the price of gas starts to erode consumers discretionary spending usually these types of pay for services are the first to go.  Not everyone needs the benefits from a fee based subscription plan.  Remember eyeballs to a sight does not equal increased revenues or profits.

Via the Associated Press release here

• In a report issued Wednesday, Goldman Sachs analyst Heath Terry upgraded his rating on LinkedIn stock and predicted the stock will hit $135within the next year. That would surpass the all-time high of $122.70 that LinkedIn'sshares reached on their first day of trading 10 months ago.
• Terry became more optimistic after studying the usage trends on LinkedIn and evaluating how valuable its digital rolodex of more than 150 million resumes is becoming to employers. He expects the effectiveness of LinkedIn's recruitment tools to lure more companies into signing up for subscription services that provide more insights into LinkedIn'susers.