Investing.com – Pinterest plunged in aftehrours trading Thursday as softer current-quarter guidance offset better-than-expected Q3 results.
Pinterest Inc (NYSE:PINS) was down more than 12% in premarket trading Friday.
The company reported adjusted Q3 earnings of $0.40 a share on revenue of $898.4 million, beating expectations of $0.34 and $896.9M, respectively.
Global monthly active users, or MAUs, decreased 11% year over year to 537M, with average revenue per user rising 5% year over year to $1.70.
Looking ahead to Q4, the company said it expected revenue to be in the range of $1.125B to $1.145B, or $1.135B at the midpoint, compared with estimates for$1.145B.
Here's how Wall Street analysts reacted to the results:
BMO Capital: The firm maintained an Outperform on the stock but reduced the price target to $40 from $46. This was due to: "Higher: 1) R&D headcount costs and 2) infrastructure costs, which should continue improving the ranking/recommendation systems for users and advertisers in the longer term."
Morgan Stanley (NYSE:MS): "PINS 3Q/4Q rev came in 1% below us as weak food/beverage ad spend (L-MSD % headwind) weighs on results. But PINS ad pipeline remains strong (item level/ROAS bidding and
Performance+), which will be important to [the '25 topline] (coupled w/ lapping F&B headwinds."
Barclays (LON:BARC): "The after-hours reaction to another workman like quarter from PINS seems a bit overblown. 4Q growth is holding up fine in light of PINS mix, albeit slowing 1-P. As long as PINS can keep
increasing ad load, the revenue trajectory should be fine. Given comments on ad relevancy improvements, there should be room to ramp it."
Bank of America: "Stock was down 13% AH, which we attribute to a 1% 3Q revenue and 4Q guide miss vs expectations, lingering disappointment on Amazon/Google 3P deal contribution, & ramping headcount investment. While 1Q’25 growth will likely decelerate on a tough comp, for full year ‘25, we expect a healthy growth vs industry." BofA lowered its target for PINS to $39 from $45, maintaining a Buy rating.
Jefferies: "TTD and PINS had similar Q3 narratives with both reporting slight rev beats, but guiding to Q4 rev just below buyside expectations. Given limited changes in our estimates for PINS, the stock will now trade at just 11x our FY26 EBITDA based on the AH price," they wrote. "We would be buyers of weakness on both names, as we see positive catalysts for both in FY25."
Stifel: "Putting the guide aside, we found a lot of positive commentary around early results from several initiatives the company has launched in recent quarters (lower-funnel tools, 3P demand partnerships, Performance+), with more still to come (ROAS Bidding, new geos for 3P demand)."