Pinterest Inc. (pin) shares rose nearly 21.5% during an extended trading session on Monday as investors cheered the company’s second-quarter results. In particular, our website traffic tool metrics suggested the dynamics of the company’s user numbers during the quarter.
Revenue was $665.9 million, up 8.6% year-over-year, in line with Street’s expectations. Meanwhile, earnings per share (EPS) was $0.11, $0.07 below consensus. Revenue from the US and Canada grew in single digits, while revenue from the rest of the world increased 71%. Notably, average revenue per user (ARPU) grew 17% globally and 80% in the rest of the world segment.
Pinterest CEO Bill Ready commented: ”
Looking ahead, Pinterest expects modest mid-single-digit top-line growth and low-double-digit operating expense growth in the third quarter.
Elliott rests believing he is ready
The driving force behind Pinterest’s stock price surge was a positive statement from Elliott Investment Management, which is currently the company’s largest investor. Elliott highlighted Pinterest’s growth potential and expressed faith in Bill Ready.
“As the market-leading platform at the intersection of social media, search and commerce, Pinterest occupies a unique position in the advertising and shopping ecosystem, and CEO Bill Ready is well positioned to oversee Pinterest’s next phase of growth. Kudos to Ben Silberman and the board for making a leadership transition and look forward to working together as Ben, Bill and the board move forward to realize Pinterest’s full potential. I look forward to continuing.”
PINS Thoughts by Analysts
At the same time, yesterday, RBC Capital’s Brad Erickson reiterated his hold rating on the stock, with a price target of $23.
Overall, Street has a pending consensus on Pinterest with an average price target of $23.29, implying a potential upside of 16.51%. This comes after the stock has fallen nearly 45% so far this year.
While Elliott’s statement and expected gains in the third quarter boosted investor sentiment, the company’s global monthly users fell 5% year-over-year to 443 million. This means that Pinterest has to adjust to your audience’s tastes.
Additionally, this user drop-off can also be gleaned from website traffic tools. The tool shows that overall website visits to Pinterest decreased by 20% across devices compared to the previous quarter.
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