Pinterest’s Q4 sales forecast was also lower than expectations.
- Pinterest blamed the revenue slowdown on weaker cross-border seller spending due to EU regulatory changes and the timing of Prime Day and the World Cup.
- The post-results drop extended the weakness over the past year.
- However, retail sentiment for PINS shifted to ‘bullish’ from ‘bearish.’
Pinterest (PINS) stock tumbled over 7% in overnight trading ahead of Friday after its third-quarter results and Q4 forecast came in below expectations, a report that CEO Bill Ready said he was not particularly pleased with.
Pinterest attributed the six-percentage-point sequential slowdown in revenue growth to a pullback in spending by cross-border sellers following EU regulatory changes to the de minimis exemption.
“Approximately 2 points reflected the timing of Prime Day and World Cup-related spend that we called out last quarter. The remaining point reflected foreign exchange, which added 1 point to Q2 growth and was neutral in Q3,” Ready said on the analyst call.
Pinterest stock ended 4.8% lower in Thursday’s regular session after Alphabet’s earnings sparked fears about advertising growth.
Pinterest Q3 Recap
“Overall, Q3 revenue came in below our range. We are not happy with that result, and we have clear plans in place to accelerate our revenue diversification efforts,” Ready said.
Pinterest’s sales rose 11.9% to $1.17 billion, missing analysts’ expectations of $1.21 billion, while adjusted profit of $0.46 per share was also below the expected $0.49. Ad impressions rose 17%, while ad pricing fell 4%.
The company forecast Q4 revenue in a range of $1.425 billion to $1.475 billion, which would represent growth of 8% to 12% – although below the expectation of $1.52 billion.
Retail View On PINS
On Stocktwits, retail sentiment for PINS flipped to ‘bullish’ from ‘bearish,’ with several traders expecting the stock to bounce back in the near term.
“$PINS traded this stock for years, it does the same thing every earnings, drops 20 percent ramps 10 percent then goes flat in the AM then the following week drops 5 percent finds its way back to 19 every time,” a trader said.
Another wrote: “$PINS I bought more. At $22 I unloaded a third of my position and now, buying right back in. Earnings was not bad at all. Users grew by 60 million. Revenue by 12% and with the new CFO, they are going to drive efficiencies. This will be back into the $21 range by New Years.”
Year to date, PINS stock is down 23%.
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