LNKD: Will It Continue To Connect With Investors?

One of the biggest momentum names, LinkedIn Corp.

, reports second quarter earnings after the close today, Thursday July 31st. Earnings per share (EPS) are expected to be $0.40 with $510 million in revenue. While LNKD, trading currently at 181.74, has rallied nearly 28 percent off the May 2014 lows of $141, the shares are still down nearly 16 percent for the year, and well below the all-time highs of 257.56 set on September 11, 2013. Although revenue growth looks to remain strong at nearly 40 percent year over year, the real question for investors will be how that revenue growth will translate into earnings growth, especially given that LNKD has a market cap of 19.72 billion. With the Fed now tapering, much of the easy money tailwinds that fueled gains in momentum names LNKD is no longer evident. Forward guidance, therefore, will be especially crucial, with consensus for third quarter revenue at $541 million. Any disappointment in the guidance could lead to further weakness in LNKD shares.