Is Pinterest Stock a ‘Sell’ before Its Q4 Earnings?

Pinterest (NYSE:PINS) stock is trending down in today’s trading session. The stock has fallen about 2.9% as of 10:28 AM ET. However, Pinterest stock rose 0.49% on Tuesday and closed at $22.46. At this closing price, Pinterest’s market capitalization was about $12.5 billion. The stock has gained over 20% so far this year.

Pinterest’s fourth-quarter expectations

Pinterest will report its fourth-quarter earnings results after the market closes on Thursday. For the quarter, Wall Street analysts expect the company to post a non-GAAP EPS of $0.08 on revenue of $371.4 million. Analysts expect a 2019 non-GAAP EPS of -$0.09 on revenue of $1.11 billion.

Pinterest’s management has a fiscal 2019 revenue guidance range of $1.100 billion–$1.115 billion. For 2019, the company also expects the adjusted EBITDA to be -$30 million to -$10 million. However, Wall Street analysts expect an adjusted EBITDA of -$10.6 million in 2019.

In the third quarter, Pinterest reported a non-GAAP EPS of $0.01 on revenue of $279.7 million. The company’s monthly active users totaled $322 million.

Peer comparison

Snapchat parent Snap (NYSE:SNAP) posted its fourth-quarter earnings results on Tuesday. The company’s global daily active users were 218 million in the fourth quarter. Snap reported revenues of $561 million, which implies a rise of 44% YoY (year-over-year). The company reported a non-GAAP EPS of $0.03 in the fourth quarter compared to -$0.04 in the fourth quarter of 2018. Read How Snap Stock Looks as It Enters a Downturn to learn more.

Facebook (NASDAQ:FB), which released its fourth-quarter earnings on January 29, delivered impressive results. In the fourth quarter, Facebook reported revenues of $21.1 billion, which implies a rise of 24.6% YoY. The company reported an adjusted EPS of $2.56 in the fourth quarter, which implies a rise of 7.6% YoY. Facebook’s number of daily users grew to 1.66 billion, while it reached total monthly users of 2.50 billion in the quarter. Wall Street analysts expected Facebook to post a non-GAAP EPS of $2.53 on revenue of $20.89 billion. Read 3 Takeaways from Facebook’s Q4 Earnings Report to learn more.

Pinterest’s target price

Pinterest is covered by 24 Wall Street analysts. Among the analysts, 11 recommend a “buy,” 12 recommend a “hold,” and only one recommends a “sell.” Analysts’ mean target price on the stock is $26.27, which implies a 17% gain from the current level of $22.46. The lowest target price estimate is $14, while the highest is $32.00.

Earlier today, Loop Capital initiated coverage on Pinterest stock with a “buy” rating and a target price of $29. As reported by CNBC, Loop Capital analyst Rob Sanderson thinks that “PINS is among the most interesting of SMID Cap stocks in the US Internet sector with great potential as an advertising and eCommerce platform. Engagement is not a high-frequency, daily habit like social media peers but the network is showing healthy user growth with monthly active user’s up 28% in 3Q.”

Technical level

Based on the closing price on Tuesday, Pinterest stock was trading 3.0% above its 20-day moving average of $21.81. The stock is also trading 13.0% above its 50-day moving average of $19.87 and 0.5% above its 100-day moving average of $22.34.

Pinterest’s 14-day relative strength index score is 62. The score suggests that the stock is nearing the overbought level. The stock’s upper, middle, and lower Bollinger Band levels are $24.09, $21.63, and $19.18, respectively. On Tuesday, the stock closed near its middle Bollinger Band level, which indicates that it isn’t overbought or oversold.