Will LinkedIn's perfect earnings streak continue?
LinkedIn has had an impressive run when it comes to beating Wall Street's quarterly estimates. But analysts continue to raise the bar, and it's getting difficult for the company to keep up with the Street's lofty predictions.
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For the eight quarters LinkedIn has been a public company, it has beat analysts' earnings and revenue estimates. But that perfect record has driven Wall Street to push its projections beyond the company's forecast, increasing the pressure to deliver big results.
"We also note that consensus estimates for revenue and EPS, including ours, are above the high end of the company guidance, but the company has a history of actual results materially exceeding consensus," said Colin Gillis, an analyst for BGC Partners, said in a note Tuesday.
LinkedIn is scheduled to report second-quarter earnings after the bell Thursday, and analysts forecast earnings per share of 31 cents on revenue of $354 million, according to Thomson Reuters. In year-earlier quarter, the company reported EPS of 16 cents on revenue of $228 million.
(Read more: LinkedIn earnings beat; outlook falls short)
Gillis, who has a buy rating on the stock with a price target of $225, said BGC's revenue estimate for the quarter is $358.3 million, about 10 percent more than the first quarter and up 57 percent year-over-year. He looks for EPS of 33 cents, which is also above the Street's consensus.
LinkedIn's stock price has risen after earnings in four of the last five quarters, but in the last quarter, reported in early May, its share price had a 13 percent pullback, Gillis said. But he added that the stock fully recovered from its fall from grace and then some since. And he said he expects the company will continue to outperform.
"LinkedIn remains our best idea for investors who can handle stock price volatility but seek exposure to a high-growth company with a market capitalization at $22 billion that allows room for expansion," he said in the note. "We are positive on LinkedIn's positioning as the professional identity on the Internet for its users that we estimate at over 240 million, up from 225 million in the March quarter. That is approximately two new users every second in the June quarter."
LinkedIn's growth has no doubt been reflected in its stock price. The stock is trading at about five times its IPO price of $45 and near its peak of $209.39. Wednesday afternoon the stock was trading at about $204.
The company has three primary revenue drivers: talent and hiring solutions for recruiters and employers, marketing solutions for advertisers and premium subscriptions for users. In the second quarter, LinkedIn hiked some of the fees it charges for these services, which may bump up its revenue.
But the company has also been pushing to make more money from advertising. Much like Facebook, LinkedIn is attempting to increase the number of ads appearing in users' feeds. According to Gillis, marketing solutions growth was up 56 percent in the March quarter from a year earlier.
Despite analysts optimistic estimates though, it's important to note that LinkedIn faces headwinds as other social networks and tech giants begin to home in on its niche.
"The company could suffer is competition from companies such as Google and Facebook increase their focus on offering network services for the professional identity market," Gillis said. "While LinkedIn has over 225 million users, Facebook has 1.1 billion active users and Google has 135 million active users."
—By CNBC's Cadie Thompson. Follow her on Twitter @CadieThompson.