Once a pandemic darling, Pinterest (NYSE:PINS) has suffered from big selling. PINS stock saw the high of $88 in 2021 when the pandemic was at its peak and the majority of us were locked inside our homes. However, as the impact of the pandemic subsided, PINS stock started to fall. The numbers reflected declining user interest and investors started losing faith in the company. However, PINS stock seems to be in consolidation mode now, while it is currently trading at $22.68.
The fourth-quarter revenue numbers reflected 11% year-over-year growth in the U.S. market and 61% growth in the international markets. An important metric — the average revenue per user was $7.43 in the U.S. and 57 cents in the international markets. But the global monthly users are declining and it is expected that they will continue to decline in the near future. If the company manages to report improved average revenue per user, PINS stock could rebound. Further, the company is moving toward an environmental, social, and governance (ESG) approach and it will prohibit ads and posts which feature climate change misinformation. This is a good move by the company, but it did not have much impact on the stock.
Pinterest will aim to display solid numbers before the next earnings release. Analysts expect the company to report earnings of $574 million and an EPS of $0.03. The number is much lower than the revenue generated in the previous quarter, but the company did set lower expectations for the quarter.
Several social media stocks have been suffering recently and Pinterest is not alone. However, it does look like a strong player in the industry and one that should not be solely considered a pandemic darling. My InvestorPlace colleague Sakshi Agarwalla thinks PINS stock may be down, but it is not out.
The long-term outlook on the stock is positive and it is currently dropping due to several macroeconomic factors that are unrelated to the fundamentals of the company.
On the date of publication, Vandita Jadeja did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
