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Pinterest Shares Surge to Record High After Q3 Earnings Beat, Robust Revenue Projections

Pinterest, which debuted on the Nasdaq in April of last year, will open trading Thursday with a market value of more than $40 billion after smashing Wall Street forecasts for its third quarter earnings.

Pinterest Inc.  (PINS) - Get Pinterest Inc. Class A Report shares surged to an all-time high Thursday after the image-sharing social media platform smashed third quarter earnings estimates and forecast another surge in ad revenues heading into the final months of the year.

Pinterest said its quarterly revenues for the three months ending in September rose 58% from last year to $443 million, well ahead of the Street consensus forecast of $383.25 million. Adjusted profits were also firmer, rising to 13 cents per share and beating Street estimates by more than 10 cents.

Monthly active users on the platform, Pinterest said, rose 37% to 442 million, with around 98 million of that total coming from the United States. Average revenue per user was tabbed at $1.03, Pinterest said, topping the FactSet estimate of 90 cents.

Younger users were also attracted to the Pinterest platform thanks to upgraded Apple  (AAPL) - Get Apple Inc. Report iPhones, the company said, who used Pinterest for customized background filters. That dynamic could help the group see 60% revenue growth in the current quarter, the company forecast, 

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“More than ever before, people are coming to Pinterest to get inspiration for their lives—everything from planning early for a socially distant Halloween to creating great home schools for their kids,” said co-founder and CEO Ben Silbermann. “Our top priority is to continue making Pinterest home to the most inspiring and actionable content. This quarter we launched a set of tools to empower creators to show and share their ideas with people who are ready to act.”  

Pinterest shares were marked 38.1% higher in early trading Thursday to change hands at $67.67 each, an all time high that extends the stock's six-month gain to around 225% and values the San Francisco, California-based group at just under $41 billion.

"Pinterest's status as an inspirational social platform continues to resonate with users and advertisers, as evidenced by momentum in users and a material acceleration in revenue (tracking toward ~60% y/y growth for 2H20E)," said KeyBanc Capital Markets analyst Justin Patterson, who lifted his price target to $76 while maintaining his 'overweight' rating on the stock. 

"We believe it is early innings for monetization, and anticipate further investments in content and AdTech tools can sustain >30% annual revenue growth through 2022E," he added.