Pinterest, Inc.'s stock is on a downward trend following a disappointing third-quarter earnings report, which fell short of analyst predictions. The company witnessed a significant drop in its stock value, with shares plunging approximately 12% after the earnings call and sustaining this decline into Friday's trading session.
In terms of financial performance, Pinterest reported an earnings per share of 4 cents, which was below analysts' expectations of 7 cents per share. Despite this miss, the company managed to exceed revenue estimates, reporting sales of $898 million, slightly surpassing the predicted $896.34 million. Within its revenue breakdown, Pinterest disclosed earnings of $719 million from the U.S. and Canada, $137 million from Europe, and $42 million from other global regions.
Moreover, Pinterest presented essential business metrics such as an Average Revenue Per User (ARPU) of $1.70 and Global Monthly Active Users (MAUs) totaling 537 million. CEO Bill Ready attributed some of the company's performance to investments in artificial intelligence, enhancing personalized experiences, and optimizing ad tools. Pinterest's lower-funnel ad tools were highlighted as a significant growth driver for the business, attracting advertisers seeking to engage with the platform's expanding audience interested in discovering, curating, and shopping. Despite these efforts, the company's forecasts for the fourth quarter of 2024, anticipating revenue between $1.12 billion and $1.14 billion, are lower than analyst expectations, possibly contributing to the stock's decline. Multiple analysts have adjusted their price targets following the earnings report, reflecting the company's current performance and outlook. As of the latest data, Pinterest's stock price is down by 15.9% at $28.55.