Pinterest erases most of its after-hours losses after positive earnings call, analysts boost numbers By Investing.com

By Senad Karaahmetovic

Shares of Pinterest Company (NYSE:) is trading modestly in the red ahead of Tuesday’s open despite the company reporting weaker-than-expected fourth-quarter revenue, alongside soft guidance.

PINS EPS was $0.29 on revenue of $877 million, compared with consensus for earnings of $0.27 on revenue of $887 million. Monthly active users (MAU) reached 450 million, in line with consensus. Europe delivered a higher-than-expected MAU while North America and Rest of the World fell short of estimates. Average Revenue Per User (ARPU) was $1.96, well below Street’s $1.98.

Pinterest stock initially fell 13% after its fourth-quarter earnings report, however, the stock turned higher after management indicated on the earnings call that it expected ​will achieve higher profit margins by 2023, hinting at cost-cutting actions. Shares fell 1.4% in the pre-marketing session on Tuesday.

The company also announced plans to buy back $500 million of its stock over 12 months. Furthermore, it has been announced that Chief Financial Officer Todd Morgenfeld will be leaving on July 1, 2023.

CEO Bill Ready said the company is “focused on increasing monetization per user, integrating shopping across the core user experience, and increasingly driving operational rigor.” . While the entire industry is facing headwinds, we are rapidly adapting to the changing macro environment and are committed to creating a more positive online experience for users and advertisers. ours.”

In terms of tutorials, Pinterest added:

“Our current expectation is that Q1 2023 revenue will grow at a low single digit rate basis, taking into account the slightly lower exchange rate constraints compared to the previous year. with the fourth quarter of 2022.”

Bernstein analysts have increased their price target to $27 per share from $25 previously for the Market Performance-rated PINS stock.

“We accept management’s view that we will see margins expand throughout 2023 as revenue leverage emerges and marketing and headcount-related costs decline in the coming year. books,” they wrote in a customer note.

Wolfe Research analysts also increased their price target as they rallied to $33 from $30 previously. They rate PINS stock as Good.

“PINS is making steady progress on key LT initiatives (shopping, video, whole-channel goals). Macro uncertainty remains an overhang across the entire digital ad mix but PINS’s top revenue growth is showing relative outperformance. Looking ahead, we see potential for acceleration through 2023 as key initiatives scale further, analysts say.