Pinterest Shares Leap After Stronger-Than-Expected Earnings Report

Revenue, user growth, adjusted profit and the company's 2020 revenue forecast all exceeded analysts' estimates.
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Shares of online bulletin-board service Pinterest (PINS) - Get Report soared after the social media company exceeded analysts’ expectations in its fourth-quarter earnings report.

Revenue jumped 46% in the quarter from a year earlier, to $400 million. That easily topped analysts’ forecast of $371.2 million, according to Refinitiv.

Adjusted earnings per share totaled 12 cents in the fourth quarter, compared to analysts’ consensus of 8 cents, according to FactSet.

Monthly active global users surged 26% to 335 million, beating analysts’ prediction of 331.3 million, according to FactSet.

And Pinterest projected 2020 revenue will register up to $1.52 billion, compared to analysts’ estimate of $1.5 billion, according to Reuters.

"A strong Q4 marked the end of a year where we improved the foundation of the Pinterest app with more inspiring recommendations, faster performance and improved shopping experiences," Ben Silbermann, Pinterest CEO, said in a statement.

Loop Capital Markets analyst Rob Sanderson initiated coverage of the stock with a buy rating and a $29 price target Wednesday.

He’s impressed with Pinterest’s user growth.

“We think PINS is among the most interesting of the small- and mid-cap stocks in the U.S. Internet sector,” Sanderson wrote in a report. Pinterest has “great potential as an advertising and e-commerce platform.”

While Pinterest users don’t engage as much with the site as users of some other top social media sites, “the network is showing healthy user growth,” Sanderson said.

“We think the nature of engagement on Pinterest is highly aligned with commerce, offering very strong monetization potential, and we think that making Pinterest shoppable is a major opportunity,” the analyst said.

In after-hours trading Thursday, Pinterest shares stood at $26.85, up 16.69% from the close. The stock gained 5.02% during the regular trading session.