Pinterest stock tanks 21% on revenue miss and disappointing forecast

Key Points
  • Following Google's reported advertising growth of 17% and Facebook's growth of 28%, Pinterest showed on Thursday that it's picking up market share against its much larger rivals.
  • Pinterest 's stock is up from its IPO price in April, but has lost almost one-third of its value since peaking in August.
Ben Silbermann, co-founder, chairman and CEO of Pinterest, speaks in front of the company's logo at the New York Stock Exchange (NYSE), during the company's IPO on April 18, 2019 in New York City.
Johannes Eisele | AFP | Getty Images

Pinterest shares plunged 21% in premarket trading Friday after the image-sharing site reported disappointing third-quarter results a day earlier.

Here are the key numbers for the period ended in September:

  • Earnings per share: 1 cent, excluding some items, vs. 4 cents loss forecast by Refinitiv
  • Revenue: $279.7 million, vs $280.6 million forecast by Refinitiv
  • Monthly active users: 322 million, vs. 311.8 million forecast by FactSet
  • Average revenue per user: 90 cents, vs 91 cents forecast by FactSet

Pinterest also missed estimates for its 2019 full-year outlook. The company said that revenue for the year will come in at $1.1 billion to $1.115 billion. Analysts were expecting sales of $1.12 billion, according to Refinitiv.

The stock sank to $20.11 following the report after closing down 3% at $25.14. At its after-hours price, Pinterest is narrowly above its $19 IPO price from April.

While much smaller than online ad rivals Google and Facebook, Pinterest is growing at a faster clip and picking up some market share. Sales grew 47% in the latest quarter from a year earlier, topping Facebook's 28% ad sales growth and Google, which reported an increase of 17%.

CEO Ben Silbermann said in the statement that the company redesigned the site in the third quarter "to make the service more intuitive" and "to help people discover new ideas they didn't know about."

Still, Pinterest has yet to turn a net profit at a time when investors are putting more value on the bottom line than the top. The company said that it expects a 2019 adjusted loss of between $10 million and $30 million, which is narrower than its previous range of $25 million to $50 million. It reported a net loss for the third quarter of $124.7 million as stock-based compensation climbed to $130.3 million from $3.9 million a year earlier.

Correction: An earlier version of this story had the incorrect figure for monthly active users.

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