If 59% Revenue Growth (Apple) is Good, 100% Growth (LinkedIn) Must be Better, Right?

Here’s one of the reasons we love Apple (AAPL) stock: it has amazing revenue growth, which bounced from 38.97% to 73.27% to 58.85% in recent quarters.

AAPL Revenue Growth data by YCharts

That matters because if a company has good revenue growth, it has customers who like and keep buying its products, apparently seeing value in them. By turning iPod buyers into iPhone and iPad buyers, Apple builds up its business. It leverages its cost base, as business school professors might say, and stretches profits margins like so:

AAPL Profit Margin data by YCharts

That's why revenue growth is a key metric, and positive revenue growth is key. Without it, Apple would be just one more dreary consumer products company trying to squeeze out costs and extend tired brands. (Tide pods, anyone? Those are the small packages of detergent that according to at least one review can turn a load of white clothes into blue splotchy versions.)

So, if revenue growth is king, then let’s look at a technology and social networking company that is outdoing Apple in revenue growth: LinkedIn (LNKD).

AAPL Revenue Growth data by YCharts

That's pretty impressive, it's outdoing Apple almost two-to-one. But while revenue growth is crucial, it's what a company makes of that growth that ultimately matters. LinkedIn still has a lot of work to do.

To be sure, LinkedIn doesn’t have narrowing margins like Amazon (AMZN) and salesforce.com (CRM).

LNKD Profit Margin data by YCharts

But compared to Apple, those profits are thin, not to mention expensive. People are paying top dollar for LinkedIn growth. Over at Apple, they have a PE ratio below that of tired old dogs like Procter & Gamble (PG), the company outraging some users of the abovementioned Tide Pods.

AAPL PE Ratio data by YCharts

And while Apple isn’t exactly an ancient company, it has more of a track record than LinkedIn, which looks riskier in comparison. It doesn’t help that LinkedIn’s security seems weak. It June it said hackers had “compromised” about 6.5 million members’ passwords. Security’s an issue over at Apple, too – remember when a hacker exposed all the iPad owners? -- but it doesn’t seem nearly as damaging. That security breach basically doubled as an advertisement, letting the world know that A-listers from Diane Sawyer to Rahm Emanuel had already bought then-new iPads.

Revenue growth is a start, but it's far from the whole story.

From the editors of YCharts.YCharts Pro Investor Service includes professional stock charts, stock ratings and portfolio strategies.

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