Pinterest Reports Q4 Earnings: Mixed Results Spark Stock Surge

Pinterest (NYSE: PINS) has released its Q4 results, showing revenue slightly higher than expected but earnings falling short of analysts’ estimates. The company reported sales of $1.15 billion with adjusted earnings of $0.56 per share, while expectations were for $1.14 billion in sales and $0.64 per share in earnings. Despite this, a rising user base and positive future outlook helped drive Pinterest’s stock up by 19% on February 7.

Q4 Performance: A Closer Look at Pinterest’s Results

Pinterest’s revenue of $1.15 billion marked an 18% year-over-year growth, with Europe experiencing a 21% increase and the U.S. and Canada growing by 16%. Growth in monthly active users (MAUs) and average revenue per user (ARPU) fueled this performance. MAUs rose by 11% to 553 million, while ARPU increased by 6% to $2.12, outperforming analysts’ forecasts. Furthermore, Pinterest’s adjusted EBITDA margin improved by 300 basis points to 41% during Q4, and earnings per share of $0.56 slightly surpassed last year’s $0.53.

Future Projections: What Lies Ahead for Pinterest?

Looking ahead, Pinterest estimates Q1 sales at $845 million and adjusted EBITDA at $163 million, better than the consensus estimates of $834 million and $139 million. This optimistic guidance signals positive growth for the company moving forward.

Stock Implications: Mixed Results but Higher Stock Prices

Even with a mixed performance in Q4, Pinterest’s stock has risen due to strong user engagement and a solid outlook. However, over a longer timeframe, the stock’s performance has proven quite volatile compared to the S&P 500. For example, the Trefis High Quality (HQ) Portfolio, which encompasses 30 stocks, has shown much less volatility and has comfortably exceeded S&P 500 returns in the past four years. This can be attributed to better risk-adjusted returns.

The Road Ahead: Can PINS Outperform?

Considering the uncertain macroeconomic climate, Pinterest’s stock, currently trading at $40 with a price-to-sales ratio of 7.7, is slightly above its four-year average of 7.3. Despite recent gains, there appears to be potential for further upside fueled by user growth, increasing ARPU, and margin expansion. These improving fundamentals may justify a premium valuation relative to past performance.

While PINS stock has potential for growth, it’s essential to monitor how Pinterest’s peers perform on important financial metrics. Comparing Pinterest to other companies can provide deeper insights into its financial standing. More comparisons across different industries can be found at Peer Comparisons.

[1] Returns as of 2/10/2025
[2] Cumulative total returns since the end of 2016

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.