Home News Pinterest Falls After Profit Loss: What It Says About the Digital Advertising Market

Pinterest Falls After Profit Loss: What It Says About the Digital Advertising Market

by SuperiorInvest

Key takeaways

  • Pinterest shares plunged after the social media company reported revenue that missed estimates and gave a weaker-than-expected forecast.
  • Strong gains from heavyweights like Meta and Amazon may indicate some improvement in the digital advertising market, but Pinterest’s results could suggest that smaller companies could find it harder to capture some of the gains.
  • However, analysts anticipate a strong 2024 for Pinterest, citing new partnerships with Google and Amazon, growth in regions outside the US, and investments in new products on the Pinterest platform.

Shares of Pinterest (PINS) fell more than 9% on Friday after the social media company reported revenue that missed estimates and gave a weaker-than-expected forecast.

Pinterest said its fourth-quarter revenue rose 12% from a year earlier to $981 million, but that was below estimates. For the full year, revenue rose 9% to $3.06 billion, although Pinterest still posted a net loss of $35.6 million for the year. Europe was a bright spot in the fourth quarter, with revenue up 32%.

Pinterest’s global monthly active users (MAU) grew 11% to 498 million, but the company issued weaker-than-expected guidance, with first-quarter revenue expectations between $690 million and $705 million.

Strong gains from heavyweights like Amazon (AMZN) and Meta (META) may indicate some improvement in the digital advertising market, but Pinterest’s results could suggest that smaller companies could find it harder to capture some of the the earnings.

However, JPMorgan analysts said they anticipate a strong 2024 for Pinterest, citing new partnerships with Google and Amazon, growth in regions outside the U.S. and investments in new products on the Pinterest platform.

On Pinterest’s earnings conference call, CEO Bill Ready said Pinterest is “undermonetized internationally,” with 80% of its users outside the US, although they only account for 20% of its revenue.

Analysts at Jeffries were bullish on Pinterest, saying “the fastest-revving growth rates are yet to come.”

Pinterest shares closed down 9.4% at $36.87 per share on Friday. They have gained about 48% over the past year.

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