NEW YORK, February 29, 2024 — Pinterest (NYSE: PINS) shares tumbled 17.9% in afternoon trading Thursday after the social commerce platform issued a first-quarter financial forecast that fell short of Wall Street’s expectations, sparking concerns about a potential slowdown in advertising demand.
Pinterest Stock Dips on Disappointing Outlook
Investors reacted negatively to Pinterest’s revenue and EBITDA guidance for the upcoming quarter.
- Pinterest projected approximately $961 million in revenue for the first quarter, below estimates of $981.8 million.
- The company anticipates EBITDA of $176 million, also underperforming the expected $205.4 million.
- Despite the weak forecast, Pinterest added 66 million monthly active users during the last quarter.
- Pinterest shares are down 43.2% since the start of the year.
The market’s immediate reaction highlights investor sensitivity to growth forecasts, even when user numbers are climbing. Pinterest’s guidance suggests a potential cooling in advertising revenue, a key driver for the platform.
What factors are influencing Pinterest’s stock performance? The social media company’s shares are known for volatility, experiencing 18 moves of more than 5% over the past year. However, a drop of this magnitude is relatively rare, signaling the significant impact of this news on market perception.
A similar downturn occurred six months ago when Pinterest’s stock fell 8.3% following a mixed second-quarter report. While revenue and user growth were strong, an earnings per share miss overshadowed those gains.
In the second quarter, Pinterest reported adjusted earnings of $0.33 per share, missing analyst expectations of $0.35. Revenue, however, grew 16.9% year-over-year to $998.2 million, exceeding forecasts. Global monthly active users increased by 10.7% to 578 million. Despite these positive metrics, the earnings shortfall weighed heavily on investor sentiment.
Currently trading at $15.10 per share, Pinterest is 61.8% below its 52-week high of $39.56, recorded in February 2025. An investment of $1,000 in Pinterest shares five years ago would now be worth approximately $169.33.
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