By Senad Karaahmetovic
Shares of Pinterest (NYSE:PINS) are up over 18% after the company reported better-than-expected user numbers.
PINS reported an adjusted EPS of 11c on revenue of $665.9 million, which compares to the consensus of adjusted EPS of 14c on revenue of $665.5 million. Monthly active users (MAUs) came in at 433 million to beat the $429.1 million expectations.
For this quarter, Pinterest said it expects revenue growth in mid-single digits.
“For the full year, there is no change to our previous expense outlook of non-GAAP operating expense growth in the range of 35-40% year over year,” the company added.
Moreover, Pinterest shares were boosted by the statement issued by activist investor Elliott Investment Management.
“Pinterest is a highly strategic business with significant potential for growth, and our conviction in the value-creation opportunity at Pinterest today has led us to become the Company’s largest investor,” Elliott said in a statement.
A Susquehanna analyst upgraded PINS stock to Positive on attractive risk/reward.
“While the fundamentals are still a bit choppy and there remains a lot of work ahead, we believe the new CEO and activist oversight combined with doable bogeys and an undemanding valuation have skewed the risk/reward to the upside,” the analyst wrote in a client note.
An analyst from Citi hiked the price target by $1 to $25 on stabilizing MAU trends. However, the analyst remains cautious on PINS shares.
“While we are encouraged with MAU & advertising trends and its strong balance sheet with $2.7B of cash/equivalents, given the current macro-environment and greater ’22 investments, we maintain our Neutral rating,” he told clients in a note.
A Morgan Stanley analyst said that results and Q3 guidance “were better than feared”. The analyst listed 4 things he is eager to learn more about from the new management.
- How new management intends to better execute on these opportunities;
- How management intends to improve engagement trends;
- More info about PINS’ differentiated engagement the company intends to monetize; and
- More info about the planned review of the company’s investment profile.
PINS shares were down 45% YTD heading into the results.