Pinterest soars 16% after Q3 beat; Analysts raise numbers

Investing.com -- Pinterest reported third-quarter results that topped Wall Street estimates as efforts improve monetization of its international users on its platform bolstered performance.

Pinterest Inc (NYSE: PINS) was up more than 16% in pre-market Tuesday trading.

The company reported adjusted EPS of $0.28 on revenue of $763 million, beating expectations for adjusted EPS of $0.21 on revenue of $743.9M.

Global monthly active users, or MAUs, increased 8% year over year to 482M, and global average revenue per user, or ARPU, climbed 3% $1.61 from a year earlier.

Looking ahead to the Q4, the company said it expected revenue will grow around in a range of 11% to 13% year over year, while operating expenses were expected to fall around 9% to 13%.

Bernstein analyst Mark Schmulik raised the price target by $2 to $31 per share.

"As Pinterest picks off the low-hanging fruit, we were hoping for more idiosyncratic revenue upside, but take the strong engagement trends as a sign that Pinterest may have found product-market fit with younger users which keeps the flywheel going," Schmulik wrote in a note.

KeyBanc analyst Justin Patterson also hiked the price target, going to $37 per share to reflect margin expansion and accelerating growth.

"Pinterest's 3Q results reinforce that growth is reaccelerating while expense controls remain intact, resulting in a ~600 bps inflection in 2023E EBITDA margin. We anticipate an annual margin expansion cadence of 200-300 bps y/ y in 2024 and 2025, reflecting mid-teens growth from product innovation and partnerships."

Additional reporting by Senad Karaahmetovic

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