Pinterest share price plunge 19.05% after posting larger-than-expected losses

The firm had posted a loss per share of US$0.32 per share, which was deeper that the US$0.10 loss Wall Street had predicted.

Pinterest Source: Bloomberg

Social network scrapbooking app Pinterest’s shares plunged by as much as 19% during after-market trading on Thursday after the firm posted an adjusted loss per share that was below estimates. Its full-year outlook also fell short.

Shares of Pinterest sank to as much as 19.05% or US$5.88, at US$24.99 in after-market trading.

As of 5.37am EDT, Pinterest clawed back some losses but the counter was still lower by 15.39% or US$4.75, at US$26.11.

The firm had debuted on April 18 at US$19 per share and its stock had jumped 28% on its first trading day, ending the day's trading at US$24.40. The tech stock has since observed steady gains in its share price and had closed Wednesday's session higher by 7.79% or US$2.23, at US$30.86.

Pinterest earnings report highlights

The firm had posted a loss per share of US$0.32 per share, which was deeper that the US$0.10 loss Wall Street had predicted.

First quarter sales rose 54% compared to a year ago at US$201.9 million, above estimates of US$200.8 million.

Net loss narrowed to US$41.4 million for the quarter, down from the US$52.7 million in losses made in the same period a year ago.

For the full-year, Pinterest expects revenue to come in at between US$1.06 billion to US$1.08 billion, which was lower than the US$1.09 billion expected.

Competitive online advertisements landscape

Investors are concerned with the app’s path to profitability and how Pinterest can continue to compete for digital advertisement revenue against social network giants such as Facebook.

‘Risk factors include competition for digital advertising budgets, the path to profitability in coming years and dual-class stock structure and management stability,’ said UBS analysts in a report.

‘Despite strong fundamentals and a promising runway for future growth, we see the current risk/reward on shares as balanced given the stock performance and valuation since (its) initial public offering,’ the analysts added.

For 2018, Pinterest hit about US$756 million in revenue from online advertisements, a 60% growth rate that accelerated from the previous year. The firm’s net loss had shrank from US$130 million in 2017 to US$63 million last year.

Launched around 2011, Pinterest which allows users to save images and links from websites on digital pin boards, reported 291 million monthly active users for the first quarter, a sum which follows the earlier guidance it had made in its prospectus.

The firm had 265 million monthly active users last year.


IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

Please see important Research Disclaimer.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get spreads from just 0.1% on major global shares
  • Trade CFDs straight into order books with direct market access

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
Bid
Offer
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Bid
Offer
Updated
Change
Bid
Offer
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.