LinkedIn shares fell as much as 9.4 per cent after analysts at Morgan Stanley and Evercore Partners lowered their ratings on the stock, citing concern the professional-networking company is overvalued.

Morgan Stanley and Evercore said the stock is expensive even after the company reported an unexpected second-quarter profit and said revenue soared as business customers spent more on hiring services.

The stock has more than doubled since the company’s initial public offering in May.

“Results were strong but not strong enough to justify maintaining our ‘equal-weight’ rating,” Ken Sena, an analyst at Evercore in New York, said in a research note. He dropped the stock to “underweight” and maintained a $70 price target.

“LinkedIn is the most expensive name in our coverage universe.” Morgan Stanley analyst Scott Devitt reduced his rating to “equal-weight” from “overweight”, becoming the second analyst from a LinkedIn underwriter to lower ratings on the company.

Analysts at JPMorgan Chase and Co., which also helped manage the IPO, cut their rating to “neutral” from “overweight” in July.

LinkedIn said profit before certain costs was $10.8 million, or 10 cents a share. That compared with an average analyst estimate for a loss of 1 cent, according to data compiled by Bloomberg.

LinkedIn’s third-quarter sales forecast also exceeded projections. – (Bloomberg)