Pinterest (PINS) Reports
Pinterest (PINS) reported Q4 results after the bell yesterday that were lighter than expected but don’t change the story of a company streamlining operations and tweaking the platform to drive modest user growth and, as a result, higher advertising revenue. Pinterest is also growing internationally.
As far as the numbers, revenue was up 4% to $877 million versus consensus at $889 million. Global monthly average users (MAUs) were up five million in the quarter to 450 million, about a million shy of expectations. Average revenue per user (ARPU) was $1.96, just under the $1.98 expected.
For Q1 2023 guidance, management called for low-single-digit growth – a bit of a disappointment given the market was looking for 7% growth. For the full year, analysts are pulling in expectations for revenue to grow by around 10% versus closer to 14% prior to this result. Cost controls should drive some profit margin improvement so revised 2023 EPS expectations of about $0.67 are maybe just a few pennies below what was expected a few days ago.
Stepping back, the story here hasn’t really changed. Pinterest is trying to reboot the company for life after the pandemic. And it still has massive brand recognition and arguably one of the better (if not the best) platforms out there for what it does. Better advertising monetization represents upside potential, as does any jump in consumer spending. Recession risk is still present.
With activist investor support and an undemanding valuation we’ll stick with it, so long as the stock holds up. It’s giving some back today, which isn’t a surprise as the quarter is a slight letdown. But again, without any massive issues and a broad market looking past rate hikes it’s very possible PINS starts to work higher soon. Sticking with Buy A Half.