Pinterest Stock Plummets After Earnings Fall Short Despite User Growth
Pinterest Inc. (PINS) faced a significant drop in its stock price following its third-quarter earnings report, which fell short of analysts’ expectations. Despite a surge in user growth, the company’s financial performance disappointed investors.
Pinterest’s Earnings Report Overview
For the quarter ending in September, Pinterest reported adjusted earnings of 38 cents per share. This figure was lower than the anticipated earnings of 42 cents per share from analysts surveyed by FactSet. Revenue for the period reached $1.05 billion, reflecting a 17% increase, which aligned with expectations.
User Growth Exceeds Predictions
On a positive note, Pinterest’s monthly active users grew by 12% year-over-year, totaling 600 million, surpassing estimates of 590.3 million. Chief Executive Bill Ready highlighted the effectiveness of the company’s investments in artificial intelligence and product innovation as key drivers of this user growth. He mentioned, “We’ve become a leader in visual search and have effectively turned our platform into an AI-powered shopping assistant for 600 million consumers.”
Future Projections
Looking ahead, Pinterest set its sales guidance for the current quarter at $1.33 billion, which is slightly below the anticipated $1.34 billion.
Stock Performance
Following the earnings report, Pinterest’s stock experienced a sharp decline of over 15%, dropping to 27.88 in after-hours trading. Prior to the announcement, shares had already decreased by 2.3% in the regular session.
- Pinterest shares showed an overall year-to-date increase of 13.5%
- The S&P 500 index has reported a gain of 15% in the same period
- Pinterest previously held an IBD Composite Rating of 93 out of a possible 99
This rating assesses various factors, with the top growth stocks rated at 90 or above. The recent performance may signal challenges ahead for Pinterest as it navigates market expectations.
