Pinterest (PINS) stock is higher Friday after the social media platform beat revenue and user expectations for its fourth quarter and issued a better-than-expected forecast for its first quarter.
In the three months ending December 31, Pinterest's revenue increased 17.6% year over year to $1.2 billion. Earnings per share (EPS) rose 5.7% from the year-ago period to 56 cents.
"2024 was a banner year for Pinterest, capped off by a milestone Q4 – achieving the company's first billion-dollar revenue quarter," said Pinterest CEO Bill Ready in a statement. Pinterest also said global monthly active users (MAUs) increased 11% year over year to a company-record 553 million, topping analysts' expectations of 547.4 million.
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Reported revenue exceeded a Wall Street forecast of $1.14 billion, though the EPS figure wasn't comparable due to a $1.6 billion deferred tax benefit, according to CNBC.
"People are coming to Pinterest more often, the platform has never been more actionable, and our lower funnel focus is driving results for users and advertisers," Ready added.
For its first quarter, Pinterest forecast revenue of $837 million to $852 million. The midpoint, $844.5 million, came in well ahead of analysts' expectations of $833 million.
Is Pinterest stock a buy, sell or hold?
Pinterest has significantly underperformed the S&P 500 over the trailing 12 months, sliding more than 18% vs a gain of nearly 25% for the index as management revised downward its guidance during 2024. But Wall Street is bullish on the communications services stock.
According to S&P Global Market Intelligence, the average analyst target price for PINS stock is $44.67, representing implied upside of more than 10% to current levels. And the consensus recommendation is Buy.
Financial services firm Wedbush maintained its Outperform rating (equivalent to a Buy) and raised its price target on the large-cap stock to $46 from $38 following the earnings release.
"Pinterest reported strong 4Q results ahead of our estimates and consensus for both revenue and adjusted EBITDA," wrote Wedbush analyst Scott Devitt in a Friday morning note.
Devitt said Pinterest has several initiatives to compound growth in the intermediate term, including AI-powered features, expanded ad partnerships with Amazon.com (AMZN) and Alphabet (GOOGL) subsidiary Google and increased reseller efforts in underserved markets.
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