LinkedIn & Yelp: What to Expect After the Bell

Wall Street analysts are bullish — but should you be?

By Tom Taulli, InvestorPlace Writer & IPO Playbook Editor

Today’s a big day for a pair of social IPOs — LinkedIn (NYSE:LNKD) and Yelp (NYSE:YELP).

Both companies have seen nice returns over the past three months (+13% and +29%, respectively), and Wall Street analysts think the good times will continue when the pair report earnings after the bell Thursday.

Should investors expect the same?

The consensus forecast for LinkedIn’s third quarter is for earnings to spike by 83% to 11 cents a share and for revenues to rise by 75% to $244.2 million.

LinkedIn actually has three core business models, which include Hiring Solutions, Marketing and Premium Memberships. But so far, the biggest source of growth has come from Hiring Solutions — which makes sense, considering LNKD has proven to be an effective employee recruiting platform. That’s where many eyes will be this afternoon.

However, LNKD is trading at a nosebleed 884 times earnings, so even the slightest hint of weakness could send shares reeling. If you’re not up to the risk, you wouldn’t be blamed for taking your 70% year-to-date profits and splitting before the bell.

As for Yelp, the consensus estimate is for a net loss of 4 cents a share on revenues of $35.95 million, or 61% better than the year-ago period. And investors can be a little optimistic about that target — the company also recently upped its own guidance, expecting revenues of $36.4 million instead of its previous range between $34.5 million and $35.5 million.

Yelp recently acquired Qype, a top reviews site in Europe that should add about 15 million monthly unique users to the company’s current 78 million total. However, that’s unlikely to be the tale of the tape today.

Instead, investors will want to look at a big driver for the company’s success: the mobile platform, which Yelp has yoked by forging partnerships with Microsoft (NASDAQ:MSFT) and Apple (NASDAQ:AAPL). Any information about progress on that front will be a highlight of the earnings call.

Tom Taulli runs the InvestorPlace blog IPOPlaybook, a site dedicated to the hottest news and rumors about initial public offerings. He is also the author of “How to Create the Next Facebook.” Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.

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