Pinterest Stock Rises on Earnings Beat — Is It a Buy?

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Oct. 29 2020, Updated 10:08 a.m. ET

PINS stock rose 30 percent in after-hours trading on Oct. 28 after Pinterest reported strong revenue and user growth in its third-quarter results. We'll discuss the company's third-quarter highlights and outlook.

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What is Pinterest?

Pinterest is an image sharing and social media service. It's designed to allow users to discover and save ideas online using images, videos, and animated GIFs in the form of pinboards. The California-based company was created in 2009 by Ben Silbermann, Paul Sciarra, and Evan Sharp.

Why Is PINS Stock Going Up
Source: Pixabay
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Pinterest’s Q3 earnings results

In the third quarter, Pinterest reported an adjusted EPS of $0.13 compared to $0.01 in the third quarter of 2019. The adjusted EPS beat analysts’ average estimate of $0.03. Pinterest generated sales of $443 million in the third quarter, which was 58 percent more than it did in the third quarter of 2019. The company beat analysts’ average sales estimate of $383.5 million.

Overall, the company added 26 million pinners, or MAUs (monthly active users), in the third quarter. As of Sept. 30, Pinterest’s global MAUs totaled 442 million—higher than analysts’ expectation of 436.4 million. 

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What is PINS stock price today?

PINS stock was up about 33 percent at $64.72 in pre-market trading as of 8:55 a.m. ET on Oct. 29. The stock fell 6.2 percent on Oct. 28 and closed at $49.25 with a market capitalization of $29.6 billion. PINS stock has fallen by 3 percent in the last five days, while it has risen by 95.9 percent in the last year.

PINS stock is trading 8.6 percent below its 52-week high of $53.87 and 387.6 percent above its 52-week low of $10.10. Year-to-date, the stock has risen by 164.2 percent as of Oct. 28.

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PINS stock on Stocktwits

PINS stock has become a major talking point on Stocktwits and other social platforms. While some investors on Stocktwits see the strong third-quarter earnings results as a good reason to buy PINS stock, others were bearish and expect the stock to fall.

What is PINS’s stock forecast?

According to data compiled by TipRanks, 13 of the 21 analysts covering PINS have a buy or equivalent rating. Eight analysts have a hold rating, while none of the analysts have a sell rating. Currently, analysts' average stock price forecast for PINS is $61.45, which suggests a 24.8 percent upside. The highest target price of $80 implies a 62.4 percent upside, while the lowest target price of $28 implies a 43.1 percent downside.

Long-term investors should buy PINS stock based on the strong growth outlook. The company expects its fourth-quarter sales to grow by 60 percent year-over-year. Pinterest is witnessing strong user engagement compared to rivals like Facebook and Twitter.

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