As Pinterest’s stocks plummet following the release of their first quarterly earnings since going public, analysts say that the company’s trading performance isn’t a “miss.”
“While some media headlines suggest a revenue and earnings “miss,” we view this largely as noise given a few high-end estimates skewing consensus, and more importantly, the company’s ongoing strength in U.S. advertising growth and early signs of traction from international growth efforts,” Baird analysts wrote of Pinterest.
The stock PINS, -0.41%, which has been volatile since the company’s April IPO, were last down 11% at $27.56. Amidst the dip, it remains about 45% above their IPO price of $19.
The plunge came after the company reported a net loss of $41.4 million, or 33 cents a share, on revenue of $201.9 million, up from $131 million a year ago that the company reported in filings for its IPO. After adjusting for stock-based compensation and other effects of publicly listing a company, Pinterest reported 33 cents a share in losses.
While analysts estimate a loss of 11 cents per share on the sale of $200.7 million, they also agree that the numbers showed that Pinterest had a “solid start to 2019.”
Pinterest had a U.S. monthly average users of 85 million and international monthly average users of 206 million; it reported revenue on the far right of the range it provided in its IPO prospectus. The company’s average revenue per user was 73 cents.
As a preview to the future, the company’s executives hinted on their paradigm shift as they focus on their international advertising revenues and their plan to serve ads to 13 new countries by the end of the quarter.
“However, management cautioned there would be limited contribution from international growth initiatives or self-service platform improvements this year, with more upside potential as these product offerings scale through FY20,” said the Baird analysts.