Pinterest stock jumped late Thursday after the social media company reported fourth-quarter results. Earnings missed expectations but sales came in ahead of estimates, while a strong sales forecast for the first quarter appeared to ease some investor concerns.
Pinterest said that it earned an adjusted 56 cents per share on sales of $1.15 billion for the December-ended quarter. Analysts polled by FactSet projected the San Francisco-based company would post adjusted earnings of 64 cents per share on sales of $1.14 billion.
"2024 was a banner year for Pinterest, capped off by a milestone Q4 — achieving the company's first billion-dollar revenue quarter and a record 553 million monthly active users, as we continue to drive profitable growth and free cash flow," Pinterest Chief Executive Bill Ready said in a news release.
For the current quarter, Pinterest guided for sales of $844.5 million at the midpoint of its range. Prior to the company posting its results, analysts were projecting Pinterest would tally $836 million in sales for the March-ending quarter, according to FactSet.
On the stock market today, Pinterest stock is up more than 18% at 39.94 in recent after-hours action.
Pinterest Earnings Outlook Tops Estimates
Meanwhile, Pinterest's total monthly active users increased 11% to 554 million, which was ahead of estimates for 547 million.
Pinterest also gave a stronger-than-expected guidance for adjusted profit. The company forecast Q1 adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) of $162.5 million. Analysts were projecting $141 million prior to the results.
"These were clearly very strong results vs. expectations and suggest that PINS product cycles may finally be having a material impact," Evercore ISI analyst Mark Mahaney wrote to clients following the report. Mahaney rates Pinterest as outperform.
Pinterest has sought to drive more shopping through its platform under Chief Executive Bill Ready, a former Google executive who took over Pinterest's top job in June 2022. Analysts are bullish on a partnership Pinterest formed in 2023 with Amazon.com to display Amazon product ads on Pinterest feeds. Pinterest last year struck a similar deal with Alphabet to display ads purchased through Google in international markets.
But progress has been uneven, as Mahaney alluded to. Pinterest stock sold off after its third-quarter report in November because its revenue guidance for the December-ended Q4 underwhelmed compared with expectations.
In the company's news release Thursday, Ready said that Pinterest's strategy is paying off.
"People are coming to Pinterest more often, the platform has never been more actionable, and our lower funnel focus is driving results for users and advertisers," Ready said.
Pinterest Stock Technical Ratings
Meanwhile, Pinterest's IBD Relative Strength Rating is a meager 25 out of 99. That RS Rating means that Pinterest has outperformed just a quarter of all stocks in IBD's database over the past year.
On the positive side, Pinterest has a strong EPS Rating of 97 out a best-possible 99, pointing to strong earnings growth for recent quarters.
Pinterest stock holds an IBD Composite Rating of 82 out of a best-possible 99, according to IBD Stock Checkup. The score combines five separate proprietary ratings into one rating. The best growth stocks have a Composite Rating of 90 or better.
