Why LinkedIn Stock Surged 26% in October

The LinkedIn network has grown to 400 million members around the world. Image source: LinkedIn.

What:Shares ofLinkedIn popped 26.7% last month, according toS&P Capital IQ data. The online professional network delivered an outstanding third-quarter earnings report that came in well ahead of Wall Street's expectations on nearly every important metric.

So what:LinkedIn's third-quarter revenue surged 37% year over year to $780 million, significantly above analysts' estimates for $756 million. Strong performance across its business lines, including sales growth of 46%, 28%, and 21% in its talent solutions, marketing solutions, and premium subscriptions segments, respectively, helped to drive LinkedIn's revenue increase.

LinkedIn was also more profitable than Wall Street expected, with third-quarter adjusted earnings per share leaping 50% to $0.78. Analysts anticipated only $0.45 per share.

Even better, LinkedIn's management is optimistic that the good times will continue. The company is projecting fourth-quarter revenue of $845 million to $850 milliion, the midpoint of which was above the $846 million Wall Street had forecasted.

Now what:Now 400 million members strong, LinkedIn is without question the dominant global professional platform. The company's network effects are growing stronger by the day; each new professional who joins LinkedIn makes the platform more valuable to recruiters, which offers more job opportunities, which entices more professionals to join. It's a powerful virtuous cycle that should continue to fuel LinkedIn's growth -- and benefit both jobseekers and investors -- for years to come.

The article Why LinkedIn Stock Surged 26% in October originally appeared on Fool.com.

Joe Tenebruso has no position in any stocks mentioned. The Motley Fool owns shares of and recommends LinkedIn. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.