What Happened?
Shares of social commerce platform Pinterest (NYSE: PINS) fell 17.9% in the afternoon session after the company provided a weak financial forecast for the first quarter that fell short of analyst expectations. For the upcoming first quarter, Pinterest guided for revenue of approximately $961 million and EBITDA of $176 million, both missing Wall Street's estimates of $981.8 million and $205.4 million, respectively. The disappointing outlook overshadowed a strong quarter for user growth, where the company added 66 million monthly active users, sparking investor concerns about a potential slowdown in advertising demand.
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What Is The Market Telling Us
Pinterest’s shares are quite volatile and have had 18 moves greater than 5% over the last year. But moves this big are rare even for Pinterest and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 6 months ago when the stock dropped 8.3% on the news that the company reported mixed second-quarter results where an earnings per share miss overshadowed strong revenue and user growth.
The social media platform reported second-quarter adjusted earnings of $0.33 per share, which fell short of analyst estimates of $0.35. This profitability miss was the primary concern for investors, and it overshadowed the company's strong top-line performance, where revenue grew 16.9% year-over-year to $998.2 million, beating expectations. Pinterest also reported a healthy 10.7% increase in global monthly active users to 578 million. However, the market appeared to be hoping for more, as even a slightly better-than-expected revenue forecast for the next quarter was not enough to overcome the disappointment from the earnings miss.
Pinterest is down 43.2% since the beginning of the year, and at $15.10 per share, it is trading 61.8% below its 52-week high of $39.56 from February 2025. Investors who bought $1,000 worth of Pinterest’s shares 5 years ago would now be looking at an investment worth $169.33.
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