Pinterest (NYSE: PINS) rose 18% after reporting better-than-expected user numbers. PINS reported 11c adjusted EPS on $665.9 million in revenue, compared to 14c expected. Monthly active users (MAUs) topped $429.1 million.
Pinterest forecasts mid-single-digit quarterly revenue increase. “For the whole year, there is no change to our previous spending projection,” a company representative said.
Elliott said, “Pinterest is a highly strategic business with substantial growth potential, and our conviction in the value-creation opportunity there drove us to become the Company’s largest investment.” Susquehanna analyst Shyam Patil upgraded PINS on excellent risk/reward.
We believe the new CEO, activist oversight, attainable bogeys, and undemanding valuation have tilted risk/reward to the upside.
Citi analyst Ronald Josey raised the price target to $25 on stabilizing MAU trends. Analysts are apprehensive about PINS shares.
“While we are encouraged by MAU & advertising trends and its robust balance sheet with $2.7B of cash/equivalents, we maintain our Neutral rating,” Josey informed clients.
Results and Q3 forecasts were “better than feared,” said Morgan Stanley analyst Brian Nowak. The analyst identified four things he wants to know from new management.
New management’s plans to better execute on these prospects, increase engagement patterns, monetize PINS’ distinctive engagement, and assess the company’s investment profile.
PINS shares were down 45% YTD before earnings.
Read More: Q2 Report: Pinterest Market Share Increases by nearly 18%