Pinterest stock tumbled Thursday, despite the social media company reporting third-quarter earnings and sales that exceeded expectations. Fourth-quarter guidance may have fallen short of what some investors were expecting.
Pinterest said that it earned an adjusted 40 cents per share on sales of $898 million for the September-ended quarter. Analysts polled by FactSet projected the San Francisco-based company would post adjusted earnings of 34 cents per share on sales of $897 million.
For the same period a year earlier, Pinterest earnings an adjusted 28 cents per share on sales of $763 million.
On the stock market today, Pinterest stock is down more than 14% at 29.04 in recent after-hours action.
Pinterest Guidance Misses Some Expectations
Meanwhile, Pinterest guided for sales of $1.14 billion at the midpoint of its rang0e for the current fourth quarter.
"PINS guided Q4 revenue to a range of 15%-17% growth, which bracketed Street (consensus estimates) but we believe is a couple points below buy-side expectations and is the primary reason for the large downward after-hours move," RBC Capital analyst Brad Erickson wrote to clients following the report.
On the more positive side for Pinterest, it global monthly active users grew a better-than-expected 11% to 537 million. Average revenue per user grew 5% to $1.70.
"Our AI investments are driving results by powering better personalized experiences and greater performance for advertisers, with our lower-funnel ad tools being the fastest-growing part of our business," Pinterest Chief Executive Bill Ready said in a news release.
Pinterest Stock: Five-Day Winning Streak
Prior to earnings, Pinterest gained a half-percent in regular Thursday trading. Shares have gained for five consecutive trading days, gaining more than 8% in that time. However, shares are still down about 7% year-to-date, after a 52% surge in 2023.
Coming into the report, Pinterest stock had an IBD Composite Rating of 76 out of a best-possible 99, according to IBD Stock Checkup. The score combines five separate proprietary ratings into one rating. The best growth stocks have a Composite Rating of 90 or better.
Further, Pinterest's IBD Relative Strength Rating was a meager 33 out of 99. The RS Rating means that Pinterest has outperformed just one-third of all stocks in IBD's database over the past year.
