SAN FRANCISCO, February 29, 2024 — Pinterest shares tumbled more than 18% in after-hours trading Thursday, fueled by a weaker-than-expected forecast for the current quarter and renewed concerns about the platform’s ability to compete with advertising giants like Meta and Snap.
Pinterest Stock Plummets on Disappointing Outlook
Investors reacted sharply to the image-sharing platform’s Q1 revenue projections, sending shares into a downward spiral.
- Pinterest reported fourth-quarter revenue and profit below Wall Street’s expectations.
- The company anticipates first-quarter revenue will fall short of analyst estimates.
- Despite the selloff, some investors see Pinterest as a potential acquisition target, particularly given its recent restructuring focused on artificial intelligence.
The drop follows a recent trend of decline for Pinterest stock, which had already fallen approximately 28% since the start of the year. The current downturn echoes a similar selloff in November, after the release of its third-quarter report, when shares dropped nearly 22% in a single day.
Is Pinterest a bargain buy? Some investors think so. Sentiment on Stocktwits shifted dramatically on Thursday, moving from “bearish” to “extremely bullish” as traders speculated the selloff was overdone and the company could become an attractive takeover target.
Acquisition Buzz Builds
On Stocktwits, users debated the possibility of a buyout. “Buying more. Not even worried. Opportunity here. May take a few months, but I can wait,” one user commented. Another suggested a more drastic move: “Bigger picture, they need to fire the CEO and cut a deal with OpenAI.”
Speculation centered on potential acquirers, including Meta Platforms (META), Google (GOOG/GOOGL), and even Walmart (WMT). One user stated, “At these prices it’s an acquisition target, esp for OpenAI.”
Earnings Breakdown
Pinterest reported fourth-quarter revenue of $1.32 billion and adjusted profit of $0.56 per share. However, both figures fell short of analysts’ expectations of $1.33 billion in revenue and $0.67 per share profit, according to Koyfin.
The company projects first-quarter revenue to be between $951 million and $971 million, also below the average analyst estimate of $980.6 million.
Pinterest’s performance stands in contrast to recent positive results from competitors Snap and Reddit, both of which have seen gains driven by the integration of AI features. Snap has partnered with Perplexity AI, while Reddit is collaborating with OpenAI.
