Pondering Whether to Acquire, Sell, or Keep PINS Shares at $40?
Pinterest's Q4 earnings report showed a slight revenue increase, but missed the expected earnings per share. Despite this, the stock soared 19% due to a boom in user base and an optimistic outlook. With a 18% year-over-year revenue growth, reaching $1.15 billion and boasting 553 million monthly active users, Pinterest proved its strength. Even though earnings were below expectations, the company forecasted Q1 sales of $845 million, significantly higher than the consensus estimate.
Now, let's dive into why this mixed Q4 didn't phase out investors. First, the European market saw a 21% rise in revenue, and the U.S. and Canada experienced a 16% surge. Additionally, the user base and average revenue per user both surpassed the street estimates, and the adjusted EBITDA margin expanded by 300 basis points to 41%.
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Despite facing uncertainty due to rate cuts and trade wars, some analysts still predict that Pinterest could continue to shine. Currently, PINS stock trades at 7.7 times its trailing revenues, slightly higher than its historical average P/S ratio of 7.3x. Despite missing earnings in Q4, the company's robust user growth, rising ARPU, and expanding margins justify its premium valuation multiple.
In conclusion, although Pinterest missed earnings estimates, its strong revenue and user growth projection, along with an optimistic outlook, have kept investor interest. Compare Pinterest to its peers using Trefis' Peer Comparisons, and consider investing in the Trefis High-Quality Portfolio for stable, high returns.
The optimistic outlook for Pinterest's Q1 sales, projected at $845 million, significantly higher than the consensus estimate, has contributed to the surge in Pinterest's 'pins revenue'. Despite missing earnings in Q4, the company's 'pins valuation' remains justifiable due to its robust user growth, rising average revenue per user, and expanding margins, as the 'PINS stock' trades at 7.7 times its trailing revenues, slightly higher than its historical average P/S ratio of 7.3x.
Following the positive trends in user base and revenue growth, Pinterest's 'European market' experienced a 21% rise in revenue, and the 'U.S. and Canada' market showed a 16% surge, indicating a promising future for the 'pins' that users are religiously 'pinning' on Pinterest.
