Pinterest (NYSE:PINS) is trending, and PINS stock is soaring 15% after the social media company reported better-than-expected third-quarter results and provided strong fourth-quarter guidance. Meaningful increases in its ad revenue boosted the firm’s results.
In the wake of PIN’s results, multiple Wall Street analysts were bullish on the firm’s outlook.
Pinterest’s website primarily consists of ideas for home-based innovations, such as recipes and decorations.
Pinterest’s Q3 Results and Guidance
PINS’ Q3 earnings per share, excluding some items, came in at 28 cents versus analysts’ average estimate of 21 cents. It reported sales of $763 million, compared with the mean estimate of $744 million. Moreover, the company’s monthly average users jumped 8% year-over-year (YOY) to 482 million.
The firm expects its revenue to grow 11%-13% YOY in Q4. If the company’s sales jump 12% YOY this quarter, its top line will come in at $982 million, slightly above the mean estimate of $978 million.
During PINS’ earnings call, CFO Julia Brau Donnelly reported that the firm had benefited from upbeat spending trends by advertisers in the fields of “consumer packaged goods, financial services, restaurants, travel, technology and auto.”
Analysts Are Upbeat on PINS Stock
Bank of America responded to PINS’ results and guidance by raising its rating on the shares to “buy” from “neutral.” The bank believes that Pinterest’s outlook is superior to that of other social media companies, and it thinks that PINS’ EBITDA and margins can surpass the Street’s mean estimates going forward.
Another bank, KeyBanc, hiked its price target on PINS stock to $37 due to the firm’s increasing profit margins. KeyBanc predicts that the company’s margins will increase from two percentage points to three percentage points in each of the next two years, driven by “mid-teens (percentage) growth from product innovation and partnerships.”
On the date of publication, Larry Ramer did not hold (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.
